IRS Defers 2011 Form W-2 Health Care Reporting Requirement; Draft Form Released

On October 12, 2010, the Internal Revenue Service (IRS) announced that it will defer, for one year, a health care reform law requirement that employers report the cost of coverage on employees' W-2 wage and income statements.  The postponement was made in order to provide employers the time necessary to make changes to payroll systems and procedures in accordance with the new reporting requirement. The announcement came at the same time the agency released a 2011 draft Form W-2, which already includes the codes that employers will use to report the cost of health care coverage under an employer-sponsored group health plan.  Rather than issuing a new form, the IRS will allow employers to choose whether or not to include the information in 2011. The IRS also noted that the W-2 reporting requirement is only for informational purposes and the amounts that are reported will not be taxable. AGC will continue to monitor any new developments and will share guidance from the IRS, and a final version of the 2011 Form W-2 once they are made available.