Report Employer-Sponsored Health Care coverage on the W-2 form

The Affordable Care Act (ACA) requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on the Form W-2 doesn’t mean that the coverage is taxable. The value of the employer’s excludable contribution to health coverage remains excludable from an employee's income, and it isn’t taxable. This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage. For more details, visit the IRS website, Form W-2 Reporting of Employer-Sponsored Health Coverage

Create an Employer Contribution deduction:

Open Payroll, Setup, Deduction Code Maintenance
Create a new deduction code
From the Deduction Type drop-down menu, select Employer Contribution
If applicable, enter DD in the Box 12 Code field
Enter or select the remaining applicable fields and click Accept

Assign the Employer Contribution to employees:

Open Payroll, Main, Employee Maintenance
Select the applicable Employee No
Click the Deductions button
Select the Ded Code created above
Enter the per-payroll contribution amount in the Ded Rate field
If applicable, check the Automatic check box and click OK
Note: If adding these amounts at the end of the year, populate the Month Amount fields with the appropriate amounts so that the total at the bottom equals the YTD contribution amount.
Click Accept twice
Repeat Steps 1-7 for all applicable employees

NOTE: Once set up, the Box 12 codes will automatically print on the W-2 forms. If two or more deduction codes use the same Box 12 code, the amounts are added together. The total amount prints on the W-2 form.
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