Accpac Payroll Update - New W2 Reporting Requirements

Section 6051(a)(14) of the IRS Code requires that the cost of coverage under an employee-sponsored group health plan be reported on Form W-2. However, the IRS made the requirement optional for the 2011 tax reporting year (See IRS Notice 2010-69). Further, the IRS has issues guidance that if an employer was required to file fewer than 250 returns, the reporting is not required for the 2012 tax year (See IRS Notice 2011-28). For all other employers, the reporting becomes mandatory for the 2012 tax year and is optional for 2011.

Here are some steps to take after the Sage ERP Accpac US Payroll update and 2012 tax table update have been installed to finish getting Accpac payroll ready for the newly mandated W2 reporting requirements regarding employer-provided health benefits:

  • Go to Payroll Setup -> Earnings and Deductions.
  • For any earning/deduction that will be included under the new "Cost of Employer-Sponsored Health Coverage" reporting requirement, navigate to the Employee tab and change the W2 Reporting field to Employer Provided Health Care.describe the image
  • Accpac will take the sum of all employee and employee contributions for benefits/deductions with the Employer Provided Health Care W2 Reporting method selected to the new DD W2 field.

If Employer contributions are not being kept track of in Accpac, perform the following:

  • Create a new non-cash benefit and select Employer Provided Health Care for the  W2 Reporting field. Assign the new code to the necessary employees.
  • Make an entry in Employee Transaction History using the new non-cash benefit code to account for all Employer contributions that are not being calculated by Accpac. (Make sure the date is in the correct reporting year.

New non-cash benefit code setup:describe the image

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Example of Employee Transaction History Entry:

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Contact Kevin Yu with any questions or concerns about the update.