What is the W-2 reporting requirement? The cost of employee health coverage must be reported if your company filed 250 or more W-2 forms in the previous calendar year. Employers are not required to issue a Form W-2 (that includes the reportable cost of health coverage) to any individual to whom the employer is not otherwise required to issue a Form W-2.
What information does this reporting need to contain? You will need to provide the amounts paid by both the employer and employee for health care coverage on the W-2 forms, if applicable. Employers should report the value of the health care coverage in Box 12 of the Form W-2, with Code DD to identify the amount. The IRS has provided guidance and more information on this reporting here. This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage. The reporting does not affect employee taxation. The IRS provides a helpful chart on which types of benefits must be reported, as well as a questions and answers section for additional guidance.
What do I need to do now? If applicable, ensure your payroll administrator has the value of health care coverage provided to employees and that this information is timely and accurately reported on each W-2 form.
Please refer to the IRS guidance and IRS Q & A’s for additional information. The IRS guidance page provides a chart that illustrates the types of coverage that employers must report on the form W-2. IRS Notice 2012-9 also provides further guidance on this reporting requirement.
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