Code Section 6051
| Code Section | Effective Date | Name of Act | Name of Provision | 10yr Revenue Estimate ($millions) |
|---|---|---|---|---|
| 6051 | 12/31/2010 | Patient Protection and Affordable Care Act | Inclusion of Cost of Employer-Sponsored Health Coverage on W–2 | negligible |
| 32(g), 3507, and 6051(a) | 12/31/2010 | The Air Traffic Control Act | Elimination of Advance Refundability of Earned Income Tax Credit | 1,131 |
Inclusion of Cost of Employer-Sponsored Health Coverage on W–2
Explanation of Provision
Under the provision, an employer is required to disclose on each employee’s annual Form W–2 the value of the employee’s health insurance coverage sponsored by the employer. If an employee enrolls in employer-sponsored health insurance coverage under multiple plans, the employer must disclose the aggregate value of all such health coverage (excluding the value of any salary reduction contribution to a health flexible spending arrangement). For example, if an employee enrolls in employer-sponsored health insurance coverage under a major medical plan and a health reimbursement arrangement, the employer is required to report the total value of the combination of both of these health plans. For this purpose, employers generally use the same value for all similarly situated employees receiving the same category of coverage (such as single or family health insurance coverage).
To determine the value of employer-sponsored health insurance coverage, the employer calculates the applicable premiums for the taxable year for the employee under the rules for COBRA continuation coverage under section 4980B(f)(4) (and accompanying Treasury regulations), including the special rule for self-insured plans. The value that the employer is required to report is the portion of the aggregate premium. If the plan provides for the same COBRA continuation coverage premium for both individual coverage and family coverage, the plan would be required to calculate separate individual and family premiums for this purpose.
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Elimination of Advance Refundability of Earned Income Tax Credit
Explanation of Provision
The provision repeals the advance payment option for the EITC. The taxpayer may still receive the nonrefundable portion of the EITC through the taxpayer’s paycheck, by adjusting withholding, to the extent the taxpayer otherwise has positive tax liability.
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