Another Dreaded IRS Reporting Requirement Gets Interim Guidance Today. Health Coverage Reporting Requirement on Form W2
IRS
By Stacie Clifford Kitts, CPA
Well here it is, guidance on more reporting requirements. If you are an employer providing health insurance coverage for your employees, Good For You. And….. now the IRS wants to track it. So add this to the long list of other reporting requirements dear business owners. If you file 250 or more W2’s, starting in 2012 you will need to report employee health insurance premiums on Form w2. Employers with less than 250 W2’s are exempt until further notice. I guess there is always a small sliver of a silver lining.
WASHINGTON — The Internal Revenue Service today issued interim guidance to employers on informational reporting on each employee’s annual Form W-2 of the cost of the health insurance coverage they sponsor for employees. The IRS is also requesting comments on this interim guidance. The IRS emphasized that this new reporting to employees is for their information only, to inform them of the cost of their health coverage, and does not cause excludable employer-provided health coverage to become taxable; employer-provided health coverage continues to be excludable from an employee’s income, and is not taxable.
The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2. Notice 2010-69, issued last fall, made this requirement optional for all employers for the 2011 Forms W-2 (generally furnished to employees in January 2012). In today’s guidance, the IRS provided further relief for smaller employers (those filing fewer than 250 W-2 forms) by making this requirement optional for them at least for 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013) and continuing this optional treatment for smaller employers until further guidance is issued.
Using a question-and-answer format, Notice 2011-28 also provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose to voluntarily comply with it for either 2011 or 2012. The notice includes information on how to report, what coverage to include and how to determine the cost of the coverage.
The 2011 Form W-2, prior IRS Notice 2010-69 deferring the reporting requirement for 2011, and Notice 2011-28 containing the new guidance are available on IRS.gov.
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Picking Apart the IRS’ Top 10 Tax Time Tips
By Stacie Clifford Kitts, CPA
The IRS has started their seasonal “Tax Tip” campaign. I do like these tips. They cover many of the general questions that taxpayers ask. In the interest of having a little fun, let’s pick apart Tax Tip 2011-01
- Start gathering your records – I agree. Waiting to the last minute can cost you deductions. Lost receipts or forgotten documents are the bane of tax preparation. Give yourself time to get it together before the filing deadline gets here.
- Be on the lookout for w-2 and 1099’s – well duh IRS, this kind of falls into item number 1 don’t ya think? If you are owed a 1099 or W2, these are delivered or mailed to you by January 31, 2011. So if it’s March and you don’t have your forms, better start making some calls because something is wrong.
- Use free file – This option is cool, but a bit deceiving. Free file is a great product to prepare your federal income return if your income is less than $58,001. Free file is sponsored by brand name – for profit- tax software companies. So keep in mind, you still pay for the use of the software when you prepare your state tax return (only the federal part is prepared for free).
- IRS e-file – Personally I like efiling. It is convenient, fast, accurate, and paperless. Besides, here’s a heads up, E-file is mandatory for some taxpayers. It’s a new age, time to get on the ball and accept modern technological advances.
- Consider other filing options – Yes there are other options – you could prepare your return yourself (not recommended). And, if you qualify, there are ways to get your return filed that don’t cost money. Consider checking out your local VITA program. The IRS Volunteer Income Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify.
- Consider direct deposit – I still get taxpayers who want to have their refund checks mailed to them. I can’t really get my head around this one. Generally, there isn’t a good reason to have a check mailed versus having your refund direct deposited.
- Visit the IRS website again and again – okay, lots of helpful information here. No reason not to. I say, do it.
- Remember to checkout IRS publication 17. Well, yes if you want to learn all about income tax by all means here is a publication that will help. Helpful stuff includes: a) What’s new for 2010, b) Reminder, c) When you should file a return, d) When to paper file vs. efile, c) Yada yada yada
- Review! Review! Review! – Well ya check for mistakes. But people really, if you’re not a tax expert, you really aren’t going to know if you blew it. Might I suggest you have a tax professional review your return before you file.
- Don’t panic! – Unless you want too of course – or waited until the last minute. When all else fails, the IRS says you can give them a call at 800-829-1040.
Related Articles
- Tax tip: It’s time to get started; here’s a few things you can do (seattletimes.nwsource.com)
- Some Tax Payers Will Need to File Their 1040 Later Rather Than Sooner This Coming Filing Season (staciesmoretaxtips.wordpress.com)
- Important 2011 tax filing deadlines: Jan. 14, mid-February, April 18, Oct. 17 (dontmesswithtaxes.typepad.com)
- IRS Delays Start of Filing Season for Some Taxpayers (businessweek.com)
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