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Employers who filed more than 250 W-2s in the prior calendar year must report the cost of employer-sponsored healthcare coverage on employees’ W-2s. Employers required to report must do so before issuing employees’ W-2s, which are due to employees no later than January 31, 2020.

 

Which employers must report the cost of healthcare coverage on employees’ W-2s?

Employers who filed 250 or more W-2 forms in the previous calendar year must report. This means that employers who filed more than 250 W-2s in 2018 must report the cost of coverage on W-2s in 2019.

 

What information do employers need to report?

Employers must report the amounts paid by both the employer and employee for health care coverage on the W-2 forms, if applicable. 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.

 

How do employers report the cost of coverage?

Employers should work with their payroll vendor/team to include the cost of coverage on employee W-2s. Employers must report the cost of 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 requirement here.

 

Employer Action Items:

Employers required to report should work with their payroll team/vendor to include both the employee and employer cost of healthcare coverage on employee W-2s.

 

Additional Resources:

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 must be reported on the form W-2.  IRS Notice 2012-9 also provides further guidance on this reporting requirement.

 

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.