Representative Therese Sander

“On October 4th I sent out some incorrect information about taxes. Please see the information below regarding the IRS treatment of employer sponsored health coverage.”

Reporting Health Coverage Cost on W-2 Optional for Employers in 2011, IRS Says

The Internal Revenue Service Oct. 12 released Notice 2010-69, providing interim relief for employers reporting the cost of coverage of an employer-sponsored group health plan on Form W-2, under tax code Section 6051(a)(14). According to the notice, reporting the cost of employer-sponsored group health plans on the Form W-2 will not be mandatory in 2011. Relief for employers was deemed “appropriate” by IRS and the Treasury Department to allow employers time to adjust payroll systems and update procedures in order to comply with new reporting requirements, IRS said.

Section 6051(a)(14), added by the Patient Protection and Affordable Care Act (Pub. L. No. 111-148), provides that the aggregate cost of applicable employer-sponsored coverage must be reported on Form W-2, the notice said.

IRS also issued a draft of Form W-2, Wage and Tax Statement, for 2011 with codes to allow employers to report the cost of employer-sponsored health coverage (IR-2010-103).

Though reporting the cost of coverage is optional in 2011, the amounts reportable are not taxable, the news release said. The reporting requirement is for informational purposes only, the release said. Employers will report the cost of employer-sponsored health coverage in box 12 of the form, using Code DD, according to the draft form.