IRS Releases Interim Guidance on Reporting Cost of Employer-Sponsored Coverage on W-2

By on March 31, 2011

by Ira B. Mirsky and Maureen O’Brien

On March 29, 2011, the Internal Revenue Service (IRS) released Notice 2011-28, which provides interim guidance to employers regarding informational reporting of the aggregate cost of applicable employer-sponsored group health plan coverage on Forms W-2.  Pursuant to Notice 2010-69, this reporting is optional for all employers in connection with preparing Forms W-2 for the calendar year 2011.  Most employers will be required to provide this reporting on Forms W-2, using Box 12 Code "DD," beginning with the Forms W-2 for the calendar year 2012 (i.e., Forms W-2 issued for calendar year 2012 in January 2013).

Notice 2011-28 provides an exception to the reporting requirements for some employers.  Until issuance of further guidance, an employer is not subject to the reporting requirement for any calendar year if the employer was required to file fewer than 250 Forms W-2 for the preceding calendar year. 

In addition, Notice 2011-28 contains an FAQ discussion which provides guidance concerning: (i) the employers subject to the reporting requirements; (ii) the methods for reporting the cost of coverage on the From W-2; (iii) the types of coverage the cost of which is required to be included in the amount reported on the Form W-2; and (iv) calculation methods that may be used to determine the cost of coverage.  Notice 2011-28 also contains transition relief for certain employers and with respect to certain types of employer-sponsored coverage. 

The IRS has requested comments on all aspects of the guidance under Notice 2011-28.

Click here for the interim final regulations and click here for a discussion of Notice 2010-69.




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