Starting in 2012, the total cost of employer-sponsored health coverage must be reported on the Form W-2 issued to an employee.

For W-2 forms issued in January 2013 for the 2012 taxable year, the total reportable cost will be reported in Box 12 with code DD. This does not apply to small companies that issue fewer than 250 W-2 forms each year.

Coverage that must be reported includes coverage under an employees’ group health plan. Coverage does not include long-term care coverage, dental and vision coverage, on-site medical clinics and employee assistance programs.

Failure to include employer-sponsored health coverage cost on the employees’ Forms W-2 could result in a penalty of $100 for each Form W-2, but the penalties are reduced if the failure is corrected prior to August 1.

 

Nicole Poquiz, Tax Senior
DZH Phillips LLP
Office in San Francisco, Calif.