W-2 Reporting of Health Insurance Coverage Delayed

The 2010 health care law imposed a new reporting obligation on employers, to report the aggregate cost of employer-provided health insurance on their employees' W-2s.  This reporting is informational only; not an increase in taxable wages.  The original due date of this reporting obligation began January 1, 2011.  In IRS Notice 2010-69, the IRS made this reporting "optional" for all employers for 2011 W-2s.  Now, in new IRS Notice 2011-28, the IRS extends this voluntary reporting for small employers (those issuing fewer than 250 Forms W-2 for 2011) through 2012.

The aggregate cost to be reported includes both the portion of the premium paid by the employee and the employer, regardless of whether the employee's contributions were made on a pre-tax or an after-tax basis.  However, the aggregate cost does not include contributions to an Archer MSA, Health Savings Account, or a flexible spending arrangement.  Many other special rules exist and reference should be made to IRS guidance for the details.

UPDATE:
IRS Notice 2012-9 extends the exception from reporting employer paid health costs on W-2s for small employers to future tax years beyond 2012 until further guidance is issued by the IRS.

Expanded Form 1099 Reporting Repealed

On April 14, 2011, Pres. Obama signed legislation repealing the expanded Form 1099 reporting requirement that was part of the 2010 health care law.  The expansion was to include information reporting for payments of $600 or more each year to vendors of goods in addition to services, and to also require reporting to corporations (previously exempt from receiving Form 1099s) beginning with payments made in 2012.  The repeal reverts to the former Form 1099 reporting requirements for payments of $600 or more to non-corporations for services (except that payments to corporations for legal services and health care must be reported).

In addition, the expanded Form 1099 reporting requirement for renters of real estate that was enacted as part of the Small Business Jobs Act of 2010 is repealed.  The expansion was to include information reporting for payments of $600 or more each year for vendors of goods in addition to services, and to also require reporting to corporations (previously exempt from receiving Form 1099s), beginning with payments made in 2011.  In addition, the expansion applied to all landlords, not just those who were in the business of renting property.  The repeal reverts to the former Form 1099 reporting requirements for landlords in the business of renting property to report payments of $600 or more to non-corporations for services (except that payments to corporations for legal services and health care must be reported).