A requirement that employers report the cost of health care coverage under an employer-sponsored group plan was deferred for 2011, the Internal Revenue Service said Oct. 12.
The reporting requirement is now optional for 2011, the IRS said.
The IRS and the Treasury Department wanted to give employers more time to adjust payroll systems or procedures in preparation for compliance with the new reporting requirement, the agency said. Guidance on the requirement is expected by the end of this year.
A draft of the 2011 Form W-2, Wage and Tax Statement, shows that these amounts will be reported in Box 12 of the form, using Code DD. Box 9, previously used to report Advance Earned Income Credit payments, is grayed out in the draft Form W-2 for 2011 because the credit was repealed.
IRS reiterated that the reported amounts are not taxable. The reporting requirement, included in the Affordable Care Act (Pub. L. No. 111-148) passed by Congress in March, is to give employees more information on health care costs, IRS said (Notice 2010-69).