October 12, 2010 – A Voice of Reasonableness: IRS Issues Interim Relief Regarding W-2 Reporting
The IRS issued Notice 2010-69 (http://www.irs.gov/pub/irs-drop/n-2010-69.pdf) which provides interim relief to employers from the requirement that employer-sponsored coverage be reported on employees’ W-2s beginning with the 2011 tax year. Pursuant to this Notice, employers will not be required to calculate and then report the aggregate cost of employer sponsored coverage with respect to 2011.
There are numerous reasons why the interim relief is appropriate, including the lack of clarity regarding what is in and what is out, the use of COBRA rules to determine the value of coverage, the ability of an individual to request a W-2 at any time during the tax year, etc. The official reason for the interim relief is “to provide employers with additional time to make any necessary changes to their payroll systems or procedures in preparation for compliance with the reporting requirement.” The Notice also states guidance is expected before the end of 2010.
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