New W-2 Reporting Requirements Delayed

In the Fall 2010 Employment, Labor & Benefits Quarterly Newsletter, Foster Swift addressed the new W-2 reporting requirements for employers.  Since the issuance of our newsletter, the IRS, on October 12, 2011, announced that it will postpone until 2012 the new reporting requirement that employers report the cost of coverage under an employer-sponsored group health plan.  Accordingly, this reporting will not be required until 2012 and will be deemed optional in 2011.

The Treasury Department and the IRS have determined that this deadline extension is necessary so that employers will have adequate time to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement. The IRS will be publishing guidance on the new requirement later this year.

Although reporting the cost of coverage will be optional with respect to 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, and to provide employees with greater transparency into overall health care costs.

Foster Swift will continue to follow-up and report on any guidance published by the IRS relative to the W-2 reporting requirement as well as other developments relative to the recent healthcare legislation.  Please contact our office if you have any further questions regarding this reporting requirement.