Mandatory Reporting of Health Care Coverage Costs Delayed by IRS


On October 12, the IRS issued a notice providing interim relief to employers regarding reporting the costs of group health plan coverage to employees (Notice 2010-69).  Under the notice, notification to employees on Form W-2 will not be required for 2011. The IRS also posted a draft 2011 Form W-2 on its site.

The health care reform legislation enacted in March requires employers to include the aggregate cost of applicable employer-sponsored health care coverage on employees’ W-2s for tax years starting on or after January 1, 2011 (new Sec. 6051(a)(14)). The IRS decided that employers need additional time to make changes to their payroll systems and procedures to comply with this rule. Therefore, the notice says the reporting requirement will not be mandatory for W-2s issued for 2011 and employers will not be subject to penalties for failure to meet the requirements of Sec. 6051(a)(14) for 2011 tax years.

Employers who choose to report 2011 health care coverage costs to their employees will do so in Box 12 using the code “DD.” The IRS anticipates issuing guidance on the reporting requirement before the end of the year.

Newsletter Articles

SPONSORED REPORT

Get your clients ready for tax season

With the extended 2017 tax filing season drawing to a close, now is the time to get your practice and your clients ready for the 2018 season.

PRACTICE MANAGEMENT

2016 Best Article Award

The winners of The Tax Adviser’s 2016 Best Article Award are Edward Schnee, CPA, Ph.D., and W. Eugene Seago, J.D., Ph.D., for their article, “Taxation of Worthless and Abandoned Partnership Interests.”