{"id":3686,"date":"2010-09-01T12:26:59","date_gmt":"2010-09-01T16:26:59","guid":{"rendered":"https:\/\/old.visionpayroll.com\/kb\/?p=3686"},"modified":"2010-09-01T12:26:59","modified_gmt":"2010-09-01T16:26:59","slug":"tip-of-the-week-reporting-health-insurance-costs-on-form-w-2-does-not-affect-taxability","status":"publish","type":"post","link":"https:\/\/old.visionpayroll.com\/kb\/2010\/09\/tip-of-the-week-reporting-health-insurance-costs-on-form-w-2-does-not-affect-taxability\/","title":{"rendered":"Tip of the Week: Reporting Health Insurance Costs on Form W-2 Does not Affect Taxability"},"content":{"rendered":"<p><a href=\"https:\/\/old.visionpayroll.com\/kb\/wp-content\/uploads\/2010\/08\/Doctor-and-Nurses-with-Young-Patient.jpg\"><\/a><\/p>\n<div class=\"img alignright size-medium wp-image-3687\" style=\"width:300px;\">\r\n\t<a href=\"https:\/\/old.visionpayroll.com\/kb\/wp-content\/uploads\/2010\/08\/Doctor-and-Nurses-with-Young-Patient.jpg\"><img src=\"https:\/\/old.visionpayroll.com\/kb\/wp-content\/uploads\/2010\/08\/Doctor-and-Nurses-with-Young-Patient-300x199.jpg\" alt=\"Taxability of Health Care Costs not Impacted by Form W-2 Reporting\" width=\"300\" height=\"199\" \/><\/a>\r\n\t<div>Taxability of Health Care Costs not Impacted by Form W-2 Reporting<\/div>\r\n<\/div>Many employers are aware of the <a href=\"https:\/\/old.visionpayroll.com\/kb\/2010\/06\/question-of-the-week-are-health-insurance-costs-required-to-be-reported-on-form-w-2\/\" target=\"_blank\">new requirement<\/a> under the Patient Protection and Affordable Care Act (PPACA), soon to be implemented, that an employer\u2019s health insurance costs be included on an employee\u2019s <a href=\"https:\/\/old.visionpayroll.com\/kb\/wp-content\/uploads\/2010\/05\/fw2-2010.pdf\" target=\"_blank\">Form W-2<\/a>.<\/p>\n<p><strong>Reporting Health Care Costs on Form W-2 Does NOT Make Them Taxable<\/strong><\/p>\n<p>Many have misunderstood this requirement to mean that an employer\u2019s health insurance costs are taxable to the employee. To help clarify this, the <a href=\"http:\/\/www.irs.gov\/\" target=\"_blank\">Internal Revenue Service (IRS)<\/a> recently released the following explanation:<\/p>\n<p style=\"padding-left: 30px;\">Starting in tax year 2011, the [PPACA] requires employers to report the value of the health insurance coverage they provide employees on each employee&#8217;s annual <a href=\"https:\/\/old.visionpayroll.com\/kb\/wp-content\/uploads\/2010\/05\/fw2-2010.pdf\" target=\"_blank\">Form W-2<\/a>. This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers. The amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee&#8217;s income and it is not taxable.<\/p>\n<p><strong>Health Care Costs That Were Already Taxable Are Still Taxable<\/strong><\/p>\n<p>In some circumstances, the employer\u2019s cost of health insurance is included in an employee\u2019s income, e.g., certain S corporation shareholders. This change does not affect the taxability of employer\u2019s costs that were already taxable.<\/p>\n<p><strong>Vision Payroll Is Ready to Implement This Change<\/strong><\/p>\n<p>Contact <a href=\"mailto:info@visionpayroll.com\" target=\"_blank\">Vision Payroll<\/a> if you have any further questions on <a href=\"https:\/\/old.visionpayroll.com\/kb\/wp-content\/uploads\/2010\/05\/fw2-2010.pdf\" target=\"_blank\">Form W-2<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Taxability of Health Care Costs not Impacted by Form W-2 Reporting Many employers are aware of the new requirement under the Patient Protection and Affordable Care Act (PPACA), soon to be implemented, that an employer\u2019s health insurance costs be included on an employee\u2019s Form W-2. Reporting Health Care Costs on Form W-2 Does NOT Make [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[224,321,1223,28],"_links":{"self":[{"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/posts\/3686"}],"collection":[{"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/comments?post=3686"}],"version-history":[{"count":8,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/posts\/3686\/revisions"}],"predecessor-version":[{"id":3879,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/posts\/3686\/revisions\/3879"}],"wp:attachment":[{"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/media?parent=3686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/categories?post=3686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/tags?post=3686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}