Health Care Reform

W-2 Reporting

ACA requires employers to report the cost of employer-sponsored health care coverage on employees' W-2 Forms. This reporting is applicable beginning the 2012 tax (calendar) year.

The amount is reported in Box 12 of Form W-2, using code DD.


Who Has To Report

Click here to find out if your business is required to report.

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Benefits To Include and Exclude

Click here to for a list of benefits to include and exclude.

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How To Calculate the Cost of Benefits

Click here to find out how to calculate benefits.

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W-2 Reporting Worksheet

Click here to view and print the W-2 Reporting Worksheet.

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W-2 Reporting FAQs

Click here to find out more about W-2 Reporting.

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W-2 Reporting Hot Topics & FAQs

  • What's the penalty for not reporting the correct amount on the Form W-2?
    Answer: Good question, and the answer is not entirely clear at this point. Existing law imposes penalties when a Form W-2 does not include correct information. The amount of the penalty varies, depending on when the corrected Form W-2 is filed (from $30 to $100 per form, with maximum penalties for small businesses), and higher penalties apply for intentional reporting errors or omissions ($200 per form, with no maximums). Existing law also includes exceptions – no penalties are applied if Form W-2 reporting errors are inconsequential or due to reasonable cause, and penalties are limited if Form W-2s are filed timely and reporting errors are corrected by August 2nd. Because the IRS has not yet finalized the W-2 reporting requirements for health care coverage, it remains to be seen how strictly the IRS will enforce W-2 penalties for failing to report accurate health information.
  • Does the new W-2 reporting mean that the employee will pay taxes on the value of the employer-sponsored health coverage? Or will it only be taxable if it is deemed a Cadillac Plan?
    Answer: No, the W-2 reporting requirement does not mean that employees will pay taxes on the value of the employer-sponsored health coverage. The amounts reported are not included in income. The Form W-2 reporting takes effect in 2012 and is unrelated to the excise tax that takes effect in 2018 ("Cadillac Tax"). If the Cadillac Tax applies in 2018, the tax is owed by the insurance company, plan administrator, or employer - not the employee.

    American Fidelity Assurance Company does not provide tax or legal advice.


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