On October 12, 1010, the Internal Revenue Service (IRS) issued a draft of the 2010 Form W-2 that employers will use to report wages paid and employee tax withheld for the year ending December 31, 2010. The IRS also announced that it will defer the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan, rendering that reporting optional in 2011.
The draft Form W-2 includes the codes that employers may use to report the cost of coverage under an employer-sponsored group health plan. The Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement. The IRS expects to publish guidance on the new requirement in the next few weeks.
Although reporting the cost of coverage will be optional with respect to forms issued in 2011, the IRS continues to stress that the amounts reportable are not taxable. Included in the Affordable Care Act passed by Congress in March, the new reporting requirement is intended to be informational only, in order to provide employees with greater transparency regarding overall health care costs.
Visit www.irs.gov for more information.