W-2 Reporting Requirements – Review

Background

The Affordable Care Act (ACA) added Internal Revenue Code (Code) section 6051(a)(14), which requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2. This reporting requirement was originally effective for the 2011 tax year. However, the IRS later made reporting optional for 2011.

In April 2011, the IRS issued Notice 2011-28, which furthered delayed the Form W-2 reporting requirement for small employers and provided interim guidance on the reporting requirement. On Jan. 3, 2012, the IRS issued Notice 2012-9, which revised and clarified the IRS’s interim guidance on the Form W-2 reporting requirement.

Requirement

  • Employer size for the purpose of the Form W-2 reporting requirement is based on Form W-2s issued in the prior calendar year

Small Employer

  • Filed fewer than 250 Form W-2s in prior calendar year
  • Form W-2 reporting requirement is optional for small employers, unless and until the IRS issues further guidance

Large Employer

  • Filed 250 or more Form W-2s in prior calendar year
    • 250 threshold in prior calendar year determines if requirement applies for current year
      • for example, total 2013 Form W-2s (issued in 2014) was 250 or more, then reporting would be required for the 2014 W-2 forms (issued in 2015)
    • 250 threshold is based on Form W-2s filed under company EIN
      • in a Controlled Group situation (i.e. common ownership) each EIN could be counted separately
  • Requirement became effective in 2012 for large employers
    • for large employers that did not comply in prior years 2014, technically should provide corrected W-2s and fines could accrue until correct info is provided
      • Section 6051(a) of the Code requires this information to be reported on Form W-2. An amended return, a Form W-2c, is required if an original Form W-2 fails to include the required information.

More Information

For more information go to:

http://www.irs.gov/Affordable-Care-Act/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage

 

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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.