A reminder for S-Corporations – for all shareholders who own more than 2% of the stock of the corporation, health insurance premiums paid by the corporation must be added to boxes 1 and 14 of the shareholders W-2 form. If you use a payroll service bureau, this amount needs to be reported to them when you process your last payroll of the year.
Employers get a break on reporting the value of health coverage on W-2s. IRS won’t require it for 2011 W-2s that employers will file in early 2012, as originally called for in the health care law. The delay gives firms additional time to make the necessary changes to their payroll systems. And even when the values of the coverage is shown on the W-2, it won’t be included in the employees’ incomes. Congress added the reporting rule so employees will have a better appreciation for the amount that their employers spend on their heath insurance coverage.
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