W-2 Reporting Requirements For Employer-Sponsored Healthcare
The IRS recently issued updated rules for reporting health care costs on an employee's W-2.
Keep in mind that these rules are "information only" rules; they do not cause healthcare coverage to become taxable.
For 2011 W-2s (2011 W-2s are issued in January, 2012), the healthcare reporting requirement is optional for all employers.
For 2012 W-2s (2012 W-2s are issued in January, 2013), the healthcare reporting requirement is optional for small employers only. Small employers are those that issue fewer than 250 W-2 forms.
For those employers that wish to voluntarily include the healthcare cost information on employees' 2011 W-2 forms, the cost of the health coverage would be reported in box 12 with a code of DD.
Generally, the reportable healthcare cost is the total amount of the insurance premium for the employee. Health & accident, vision and dental premiums should be included the total. The amount reported on the W-2 should not be reduced by employee contributions.
We will continue to keep you updated on the latest developments which may impact you and your business and would be happy to answer any questions you may have concerning the above. Please contact our Tax Manager Terry Martin. Or you can call 215-675-8364.
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