Is Health Insurance Income in 2011?
Is your 2011 gross income going to include the health insurance your employer provides?
The answer is NO.
As we are all aware, our country is experiencing great political division. Our political leaders in Washington are polarized and not representing us common folk very effectively. As citizens, we can either blindly feed into this division or try to keep our sanity and objectivity by carefully looking at issues placed before us.
As an example, I recently received the following email from a client:
Elwin, Is there any truth to the following email I received?
Now, your insurance will be INCOME on your W2's!
One of the surprises we'll find come next year, is what follows - - a little "surprise" that 99% of us had no idea was included in the "new and improved" healthcare legislation . . . the dupes, or, dopes, who backed this administration will be astonished!
Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private concern or governmental body of some sort.
If you're retired? So what... your gross will go up by the amount of insurance you get.
You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt.. That's what you'll pay next year.
For many, it also puts you into a new higher bracket so it's even worse.
This is how the government is going to buy insurance for the15% that don't have insurance and it's only part of the tax increases.
Not believing this??? Here is a research of the summaries.....
On page 25 of 29: TITLE IX REVENUE PROVISIONS-SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001, as modified by sec. 10901) Sec. 9002 "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income.
The following was my response:
Thanks for asking about this because there is a great deal of misinformation going around.
The President's signature on H.R. 4872, the Health Care and Education Reconciliation Act of 2010 (Reconciliation Act, P.L. 111-152 ) completes the much needed overhaul of the U.S. health care system affecting nearly all taxpayers, many employers, and many elements of the health care industry.
One of the many parts of this new legislation is the requirement that the cost of employer sponsored health coverage be included on Form W-2. For tax years beginning after December 31, 2010, employers must disclose the value of the benefit provided by them for each employee's health insurance coverage on the employee's annual Form W-2. (Code Sec. 6051(a), as amended by Health Care Act Sec. 9002).
Internal Revenue Code Section 6051, Receipts for employees spells out what is to be reported on form W-2. Section 6051 subsections (1 thru 14) include items such as employer and employee name, social security number, total gross wages, withholding of tax, elective deferrals (like 401(k) payments), how much is deducted for HSA contributions and so on. Each of these amounts is reported in different boxes on the form. This code section 6051 does not dictate what makes up these numbers it just indicates what is to be reported.
Now, the new requirements in subsection 6051(14), is just another item to be reported in yet another box on form W-2. This is so the IRS can tell if the employer is indeed paying for the employee's health insurance coverage. Nowhere in this code section 6051 does it talk about adding health insurance coverage to taxable income. And there is no cross reference to any other section causing this to happen.
The information being presented in this email is false and is being used as a scare tactic to cause a vote in a particular direction.
We all must be very skeptical and scrutinize all information we receive especially in emails. If you have any questions about other questionable correspondence please let me know.
