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Employers: Annual Update of Government-Required Fringe Benefit Reporting

Employers are required to report to the government certain information related to fringe benefits paid for or provided by an employer to its employees as such information has taxable compensation implications to employees on year-end wage reports. CohnReznick has prepared a summary to assist you in staying up to date on these year-end reporting requirements and has included worksheets within the summary provided that are designed to identify and capture such information.

Which items must be reported?

Common examples of such fringe benefits include:

  • Personal use of employer provided vehicles; and
  • Health insurance paid on behalf of a more than two percent shareholder of an S Corporation; and
  • Group term life insurance in excess of $50,000; and
  • Non-accountable reimbursements and expense allowances must be included in Form W-2 wages.

Who Reports this Information?

Please forward this memo to the appropriate personnel in your organization who is responsible for ensuring proper reporting of wage and compensation information to the government. You will need to provide the information to your payroll data processing service if you use one. Alternatively, you may contact your CohnReznick client service professional and we will assist you with proper and required reporting.

New for 2012:

Beginning in 2012, the “aggregate cost of employer-sponsored coverage” must be reported on Form W-2.  However, under a transition rule employers filing fewer than 250 Forms W-2 for the previous calendar year (for example, employers filing fewer than 250 2011 Forms W-2) will not be required to report the cost of coverage on the 2012 Forms W-2. In addition, if an employee’s employment is terminated during the year and the employee requests a Form W-2 before the end of 2012, the “aggregate cost of employer-sponsored coverage” does not have to be reported on that Form W-2.  All employers will report “aggregate cost of employer-sponsored coverage” for 2013.


For more information, please visit our Tax  webpage and contact your CohnReznick client service professional for additional guidance.

Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

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