At the end of every calendar year, your company is required to report this health benefit for tax purposes. PeopleKeep has made this easy to do by providing you with the information you will add to each employee's W-2 form.
Where to find the W-2 reporting information (Available December 31st)
Step 1: Go to your Dashboard
Step 2: Click the Reports tab on the left side
Step 3: Select Download next to the W-2 Amounts "Year"
How to fill out the W-2 form
The W-2 report helps tell the IRS how much allowance your employees were offered, regardless of how much they were reimbursed. On each employee's W-2 Form, you will report their total allowance offered (not how much they were actually reimbursed).
Step 1:
- In box 12: Enter code “FF” and include the total annual allowance amount offered. This amount does not get added to box 1 ‘gross income’.
[The IRS only wants to see the offered amount rather than the actual amount reimbursed as it’s used to help your employees adjust premium tax credits if needed when they file their personal taxes.]
Step 2: If you don’t see information on your report for Box 1 and 16 then you do not need to do this step. The report will show which (if any) eligible employees have amounts that need to be added to their income. If they didn't have minimum essential coverage (MEC) amount is required to be reported as income. To do that:
- Box 1 (Wages, tips, other compensation): Enter the amount PeopleKeep has confirmed needs to be reported as taxable income on your W-2 report.
- Box 3, 5: These reimbursements are not taxed for Social Security or Medicare, so do not add them to Boxes 3 or 5.
- Box 16 (State wages, tips, etc): The same amount entered in Box 1 should also be entered in Box 16.
Step 3: Only if you have ESPR enabled on your benefit. The amounts in the second and third column, will include any taxable amounts employees had for reimbursements of their spousal/group coverage premiums. Those should have been taxed through out the year, as they were paid. You do not need to add those amounts again, if you properly taxed those reimbursements during the year. If you did not tax those amounts through out the year, you'll need to add them to the employee's W-2 in box 1, 3, 5, and 16.
For the best answers to your questions about filing W-2 forms, we recommend reaching out to your CPA or accounting representative directly with any questions you may have.