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IRS Form W-2 Benefits Reporting

UNDERSTAND

The Affordable Care Act requires employer‐sponsored medical and dental costs to be reported on employee W‐2 forms. The following Q&A provides details on health care reporting and other tax-related benefits shown on the W-2. More detail about the W-2 is available on the UW Payroll Office Form W-2 Explanation website.

Medical & Dental Reporting on W-2

Questions & Answers

1. Why do the amounts for employer-sponsored health care insurance shown in Employee Self-Service (ESS) and on my W-2 (box 12, code "DD") differ?

For many, they differ because:

2. Is the cost of an employee’s health care benefit, as shown on the W-2 (box 12, code "DD"), taxable to the employee?

No.

3. How are my medical, dental and health savings account benefits reported on Form W-2?

Please see the Form W-2 Explanation at the UW Payroll website.

Note that the UW pays dental premiums, not UW employees.

4. What medical, dental, and Health Savings Account (HSA) costs must be included in the amount reported on the W-2? The UW is required to report two separate health care numbers:

a. Employer contributions to your medical and dental care. Note that:

  • Dental coverage cannot be waived; the UW pays your total dental premium.
  • Employee paid medical premiums were not reported to IRS. (This is optional for employers and UW did not elect to report them.)

b. Employer contributions and optional employee contributions through payroll deduction to an HSA, if applicable.

5. If I had health care coverage under the Graduate Appointee Insurance Program (GAIP), are my benefits reported on form W-2?

Yes, if you were both eligible for UW-paid GAIP coverage and have reportable W-2 income (non-stipend) from the University of Washington. These amounts are reported in box 12 under code "DD."

Other Benefits Reporting on W-2

In addition to health care, your W-2 indicates additional benefits:

Basic Retirement (UWRP, PERS/TRS/LEOFF)

Box 13 is checked on your W-2 if you contribute to one of these tax-deferred retirement plans. Your box 1 "Wages, Tips and Other Compensation" has been reduced by your retirement plan contributions (except any VIP Roth 403(b) after-tax contributions). Retirement plans are not pretax items for Social Security and Medicare and are included in the reportable total.

Optional Retirement Savings Plans

Box 12 is coded to indicate the type of plan and amount contributed to the VIP 403(b) (code E pretax; code BB Roth after-tax) and/or to WSDCP 457(b) (code G pretax).VIP Roth 403(b) contributions are made after-tax and included in your taxable income. See the Payroll Office website for more details.

Dependent Care Assistance Program (DCAP)

Box 10 shows DCAP contributions. They are not included in taxable income in box 1 or in Social Security and Medicare Wages in boxes 3 and 5.

Health Savings Account (HSA)

Box 12 shows an HSA’s combined employer contributions and employee payroll deductions. Both are tax-exempt. HSA contributions are not included in taxable income in box 1 or in Social Security and Medicare Wages in boxes 3 and 5.

Note: Flexible Spending Account (FSA) contributions are not included in taxable income in box 1 or in Social Security and Medicare Wages in boxes 3 and 5.

Tax Issues for Same-Sex Married Couples/Qualified Domestic Partners (QDPs)

Federal tax law changed in 2013 when the Internal Revenue Service and the U.S. Department of Treasury ruled that same-sex couples—also referenced as Qualified Domestic Partners (QDPs) under Washington state law—legally married in jurisdictions that recognize their marriages will be treated as married for federal tax purposes. This ruling applies only to couples who are considered legally married and does not apply to registered domestic partnerships.

If you are in a registered domestic partnership, and your partner and/or child(ren) do not qualify as eligible dependents under IRC 152, the UW must report the cost of the insurance that UW provides for these dependents and the insurance contributions you make as wages on your W-2 (displayed in box 1, 3 and 5). This is called "imputed wages."

The UW determines IRC 152 eligibility based on of the information you provided to us from the Declaration of Tax Status form. This form is completed at the time you enroll in a PEBB health insurance plan, or at any time you change your enrollment due to a qualifying life event.

If you determine that your declaration of tax status was incorrect for the prior tax year or requires updating at this time, please contact UW Benefits.

For more information, see Medical & Dental Insurance for Qualified Domestic Partners.

EXPLORE

Form 1099-R Explanation from UW Payroll - for UW retirees receiving a 1099-R form

UW Payroll Office Tax Information

IRS Questions and Answers - Employer-Provided Health Coverage Informational Reporting Requirements


Disclaimer: The information on this page does not substitute for official plan documents. If there is a conflict between the information on this site and an official plan document, the official plan document will govern. Refer to the Benefits Forms & Publications page.

Plan availability and eligibility may change depending on your employment status and/or actions of the Washington State Health Care Authority (HCA), the agency that purchases and coordinates health insurance benefits for public employees, including employees of the University of Washington, through the Public Employees Benefits Board (PEBB) program.

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Supreme Court Decision re Defense of Marriage Act (DOMA)
Read UW impact memo.