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In an Oct. 12 release, the Internal Revenue Service (IRS) announced that employer reporting of employer-sponsored group health plans on the 2011 Form W-2 is not mandatory. The optional nature of the reporting was deemed appropriate in order to provide employers adequate time to adjust payroll systems and update procedures to comply with the new reporting requirements. The new duty to report the aggregate cost of employer-sponsored health plans on W-2s, added with the enactment of the Patient Protection and Affordable Care Act, is codified in tax code Section 6051(a)(14).
IRS also issued a draft Form W-2, Wage and Tax Statement, which includes codes to allow employers to report the cost of employer-sponsored health coverage. Even with the optional reporting on cost of coverage for 2011, the amounts reported are not taxable. Reported amounts are for informational purposes only.
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