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IRS issues W-2 guidance

March 31, 2011

Late Tuesday, the Internal Revenue Service (IRS) issued further insight into the W-2 language that was incorporated in the new Healthcare Reform law. 

According to the Patient Protection & Affordable Care Act (PPACA), employers are required to annually report the cost of employer-provided healthcare coverage on the Form W-2.  This requirement was believed to be optional for tax year 2011 ONLY. However the recent guidance (Notice 2011-28) extends this optional treatment for small employers through at least 2012 (and continuing until final regulations are released), thereby providing additional relief for smaller employers.  For the purposes of this IRS ruling, “small employers” are defined as those filing fewer than 250 W-2 forms per year.

NOTE: This change does not cause employer-provided health coverage to become taxable; it continues to be excludable from income.

You can access IRS Notice 2011-28 at: http://www.irs.gov/pub/irs-drop/n-11-28.pdf

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