Employers,

Requirements and voluntary reporting

At the time of this writing, those of us who will have less than 250 W-2s this year are not YET required to report health care costs on the W-2s. Those employers with 250 or more W-2s are required to report it.

However, nothing in this prevents employers from voluntarily reporting this information. I have found this reporting to be good PR with the employees. Most employees do realize how much their employers are paying on their behalf.

Taxability

As the law now stands, these health care costs are NOT taxable to the employee and the reporting is for information purposes only. As I understand it, this is to help implement the Affordable Care Act.

Tips and Assistance

Even though you may not be required to report this information currently on the W-2s, I expect that this requirement will change in the near future. I recommend that you insure that your books and records are capturing this information on an employee by employee basis. One way to do that is to split each insurance payment by employee. If you need assistance with this, just let us know.

If you need additional information, including information as to what costs are included health care costs, please contact us.

CIRCULAR 230 DISCLOSURE: To ensure compliance with the requirements imposed by the IRS, we inform you that, to the extent this communication addresses any tax matter, it was not written to be (and may not be) relied upon to (i) avoid tax-related penalties imposed under the Internal Revenue Code, or (ii) promote, market or recommend to another party any transaction or matter addressed herein. Likewise, nothing herein is intended to convey an expression of an opinion as to the likelihood a tax position would ultimately prevail if challenged by the IRS.