Posts Tagged: W-2

Form W-2 Reporting Guidnace

in Affordable Care Act, Tax Issues

This afternoon the Internal Revenue Service issued Notice 2011-28 providing interim guidance on how to report the value of employer-sponsored health coverage on Form W-2s. The requirement to report the value of health coverage will apply beginning with 2012 Forms W-2 (that is, the forms required for the calendar year 2012 that employers generally are required to furnish to employees in January 2013 and then file with the Social Security Administration). Notice 2010-69 provided a previous extension for the 2011 calendar year. The new guidnace includes special transition rules for small employers and certain types of employer-sponsored health coverage.

Informal Treasury Comments on ACA

in Affordable Care Act

During a tax conference in Washington DC last week, Treasury made some interesting comments regarding two Affordable Care Act issues. Form W-2 Reporting:  Employers are required to report the fair market value of health coverage to their employees on the Form W-2.  This provision is effective for tax years starting January 1, 2012.  Treasury indicated that using the value of coverage for COBRA is not necessarily the best method, because it may not take into account non-tax dependent coverage.  Treasury is working on guidance, but admitted there are many other priorities ahead of this one. Nondiscrimination Rules:  The ACA extended the Code Section 105(h)… Continue Reading

State Income Tax Imputation

in Affordable Care Act, Tax Issues

While health plans are required to provide coverage up to age 26 for dependent children, several states have not adopted the updated Internal Revenue Code in order to make this coverage tax-free.  This means that for about a dozen states income imputation for dependent child coverage will be required for state income tax purposes.  However, keep in mind that the existing dependent rules of a qualifying child (under age 24 and a full time student) or a qualifying relative (any age but the parent must provide over one-half of the financial support for the child) still apply.   Some employers are requesting… Continue Reading

Form W-2 Reporting Delayed

in Affordable Care Act, Tax Issues

The Affordable Care Act provides generally that the aggregate cost of employer-sponsored health coverage must be reported on a Form W-2.   For this purpose, the aggregate cost is to be determined under rules similar to the rules for COBRA continuation coverage.  This rule is effective for taxable years beginning on or after January 1, 2011.  See, Code Section 6051(a)(14). This morning, the IRS issued Notice 2010-69, which stated that the Form W-2 reporting requirement is not mandatory for Forms W-2 issued for2011.  Accordingly, an employer will not be treated as failing to meet the requirements for 2011, and will not be subject to any penalties for failure to meet… Continue Reading