Discussion:Employer health insurance payments on W-2s

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Basic Tax Questions --> Employer health insurance payments on W-2s


Discussion Forum Index --> Tax Questions --> Employer health insurance payments on W-2s

Schenckdmm (talk|edits) said:

21 August 2010
I can't remember where I read it but it sounds like the insurance premiums an employer pays for an employee will start showing up on their W-2s.

Is this for informational purposes only and not taxable?

Solomon (talk|edits) said:

21 August 2010
Info only.

Death&Taxes (talk|edits) said:

21 August 2010
Discussion: The Ministry of Disinformation and check out Trillium's link in the discussion.

Actionbsns (talk|edits) said:

21 August 2010
My question in this is where the health insurance premium is actually going to show up on the W-2. Another poster on another thread indicates she has read that it will be included on Line 1 and be provided as an informational item, then deducted somewhere on the 1040. This doesn't make sense to me. I am under the impression, and it might be just the way I have interpreted what I've read, that the premium will be illustrated in a box for informational purposes, but not included in any of the gross figures (box 1, 3, or 5). Any other way is going to create all kinds of confusion for the DIY crowd, and how would the premium be deducted by say a 1040EZ type?

Trillium (talk|edits) said:

21 August 2010
Box 14. [edited once the IRS decided to use box 12]

The technical analysis alludes to box 14, when explaining that present law (prior to this act) did not require reporting of the value of employer-provided health insurance on the W-2, but some employers did so voluntarily in box 14. It then explains the provision in the act as now requiring that informational reporting.

If not box 14, then it's possible there could be a new info-only box for this. But read the act itself, Sec. 9002 only amends Sec. 6051(a) to add a new item to the list of what's reported on the W-2 (it adds item 14); it does not change the definition of wages required to be reported on the W-2 by Sec. 6051(a)(3) and (5).

Actionbsns (talk|edits) said:

21 August 2010
Thanks Trill. That's the way I was reading it and explaining to clients who ask.

Harry Boscoe (talk|edits) said:

21 August 2010
Except for the exception, of course, for 2% shareholders of S corporations, except that the exception is now a *different* exception from the exception that used to apply to them, except for when it's not.

Belle (talk|edits) said:

August 21, 2010
Harry, that comment was exceptional!

Natalie (talk|edits) said:

August 21, 2010
I think a separate box will be added to the W2s. Box 14 can have all sorts of stuff in it. The feds want to know who is receiving health insurance and who isn't, and they're going to want to be able to get that information as easily is possible. A separate box totally makes sense.

Actionbsns (talk|edits) said:

22 August 2010
Natalie, that's exactly my take on it. The feds are going to use this to track who has insurance as well as who has the super duper insurance to end all insurance so they can charge the excise tax on it. But I think mostly it'll be the test of compliance. Harry that's quite a comment, and yes, the S corp question will always be there, but then it IS added to box 1 wages, so it's actually different. Get another PBR and relax.

Uncle Sam (talk|edits) said:

22 August 2010
Please explain how the U. S. Government is going to track exactly every taxpayer's health insurance coverage, when you have husband and wife joint tax return where both work, either for two different employers, or in some cases, both work for the same employer, one has health insurance coverage paid for by the employer. Is the government going to conclude that only 1 spouse has coverage - then excise tax the one who doesn't?

Trillium (talk|edits) said:

22 August 2010
Uncle Sam, if you've seen a Massachusetts state return since that state enacted a similar requirement that everyone must carry health care insurance, you've got an idea of the kind of thing the federal gov't would need to put in place for the "uninsured individuals" tracking you're asking about. As you indicate, W-2 info alone isn't going to suffice.

Luckily, that particular provision isn't effective until the 2014 tax year, so they've got time to figure it out.

Uncle Sam (talk|edits) said:

23 August 2010
I HAVE seen a Massachusetts return. The only client I have from Mass - return got rejected two years ago because I (not intentionally) didn't check off a box to show everyone in the family had health insurance.

Natalie (talk|edits) said:

August 23, 2010
Let's just hope a lot of these provisions change before they become effective. One of my concerns is that by the time the "cadillac" premium tax goes into effect, my premiums will be at that rate, and we certainly don't have a top-end plan. (No, I don't think premiums will come down through this process.)

OCNumberz (talk|edits) said:

23 August 2010
Sec. 9002 only amends Sec. 6051(a) to add a new item to the list of what's reported on the W-2 (it adds item 14); it does not change the definition of wages required to be reported on the W-2 by Sec. 6051(a)(3) and (5).


Trillium, thanks, that was insightful. Although Sec. 9002 does amend 6051(a) to include REPORTING of the Health Benefits on the W-2, it does not amend (from what I can see) the wages definition. This link has a nice overview of 6051(a), with links to the (3) and (5) you mention above.

http://www.law.cornell.edu/uscode/26/usc_sec_26_00006051----000-.html

(5) the total amount of wages as defined in section 3121 (a)


Under 3121(a), Health Benefits are currently excluded, so it looks like it could just be Informational only...and probably a revamped W-2 making it quite obvious the need for HB info to be filled in.

Action, I think I have to take back what I said in another thread about it being in Box 1. I've heard that over and over again, but I guess I can see that quantity of misinformation is not necessarily quality.  ; )

To join in on this discussion, you must first log in.
Personal tools