IRS Modifies Forms W-2 Guidance

The Internal Revenue Service Jan. 3 issued Notice 2012-9, which amends interim guidance for employers on reporting the cost of their group health insurance to employees on Forms W-2 beginning with the 2012 tax year.

Like the initial guidance (Notice 2011-28), these latest modifications are in question-and-answer format (62 BTM 108, 4/5/11). The changes come in response to solicited comments on the reporting requirement under Internal Revenue Code Section 6051(a)(14) as imposed by the Patient Protection and Affordable Care Act, the agency said.

The new Q& As address issues such as cost of coverage under an employee assistance program and under a health reimbursement arrangement, and the application of the exception for fixed indemnity insurance offered by an employer on an after-tax basis.

The guidance is “generally applicable” beginning with 2012 Forms W-2, Wage and Tax Statement—that is for forms that employers generally must file by the end of January 2013—IRS said. Employers required to file fewer than 250 Forms W-2 for the 2011 tax year will not be subject to the reporting requirement for 2012 Forms W-2, the agency said.

Notice 2012-9 is scheduled to appear in Internal Revenue Bulletin 2012-4, to be published Jan. 23.