Employer-Provided Health Coverage — Not Taxable in 2011

I have heard from several clients and other consumers that they believe our health care coverage is now taxable. This is NOT true (yet, anyway).

Starting in tax year 2011, the Affordable Care Act requires employers to report the value of the health insurance coverage they provide employees on each employee's annual Form W-2. However, to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with this requirement, the IRS will defer the reporting requirement for 2011, making that reporting by employers optional in 2011.

The revised Form W-2 for 2011 is now available in draft for viewing. This is the W-2 that most employees will receive in early 2012. The draft form includes the codes that employers may use to report the cost of coverage under an employer-sponsored group health plan.

This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers. The amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee's income, and it is not taxable.

If you have any questions, feel free to call or e-mail me. You may also obtain more information at www.irs.gov

Business Tax Alert: New Tanning Tax Due Nov. 1

For businesses that provide tanning services, the first payment of the new 10% tanning tax is due Monday, November 1, 2010. The payment is made along with Form 720, Quarterly Federal Excise Tax Return. The tax went into effect on July 1, 2010. Providers of indoor tanning services collect the tax at the time the purchaser pays for the tanning services. The provider then pays these amounts to the government, quarterly, along with IRS Form 720. If you have qustions, please gfeel free to call or e-mail me.