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New W-2 Changes Cause Confusion

Posted by Wally Ross on Wed, Jul 07, 2010
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Along with the health care changes that we discussed in our previous blog post, President Obama's new laws bring change to our old friend: the W-2. Starting with the 2011 tax year (the W-2 you will received in 2012), employers will be required to report the value of health insurance premiums provided for each employee. 

This announcement caused a tremendous uproar because there have been many reports indicating that these insurance amounts would be taxable.  However, rest assured that these reports are incorrect.  Though the value of health coverage provided by employers must now be listed separately on the W-2, it will not be added to taxable wages.  Our current law states that health insurance is not taxable and the new health care laws do not change this.

The reason behind this change is simply that Congress wants to tell employees how much is being spent on their health benefits each year.


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