Tax reporting and your benefits – FAQ
Table of Contents
Your IRS form W-2 includes details of employee and employer contributions to a variety of tax-related benefits such as retirement and savings plans, medical and dental, flexible spending account and others. Federal Affordable Care Act (ACA) also requires employer‐sponsored medical and dental costs to be reported on both the W-2 and 1095 forms. The following information provides details on health care reporting and other tax-related benefits shown on these forms.
Medical and dental reporting on IRS form W-2
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:
- ESS reflects an averaged amount charged to the UW for each employee, set in legislation, and not individualized to you.
- In contrast, your W-2 is individualized and reflects the amount paid for the coverage you’ve chosen. The state Health Care Authority provides employers with the detailed amount paid to the insurer based on the individual’s plan election and dependent coverage, and that amount is included on your W-2.
2. Is the cost of an employee’s health care benefit, as shown on the IRS form W-2 (box 12/code DD), taxable to the employee?
3. How are my medical, dental and health savings account (HSA) benefits reported on my IRS form W-2 Form?
Please see the W-2 Form Explanation at the UW Payroll website.
(Note: Dental premiums are paid by the UW, not by UW employees)
4. What medical, dental, and HSA costs must be included in the amount reported on the IRS form W-2?
The UW is required to report two separate health care numbers:
- Employer contributions to your medical and dental care.
- Employer contributions and optional employee contributions through payroll deduction to an HSA, if applicable
Regarding employer contributions to your medical and dental care, please remember that: dental coverage cannot be waived – the UW pays your total dental premium; employee-paid medical premiums were not reported to the IRS. (This is optional for employers and UW did not elect to report them.)
5. If I had health care coverage under the Graduate Appointee Insurance Program (GAIP), are my benefits reported on IRS 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 reported on IRS form W-2
In addition to health care, your IRS form W-2 may indicate additional benefits:
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 (boxes 3 and 5).
Optional retirement savings plans and other items
Box 12 is coded to indicate the type of plan and amount contributed to the UW Voluntary Investment Program (VIP 403(b)) or the Washington State Deferred Compensation Plan (DCP). The codes are as follows:
Code E – Elective deferrals to an IRS Section 403(b)
Code G – Elective deferrals to an IRS Section 457(b) deferred compensation plan.
Code P – Excludable moving expenses.
Code W – Combined employee and employer contributions to a Health Savings Account. (The employer amounts are provided to UW by the Washington State Health Care Authority).
Code BB – Designated Roth contributions under a Section 403(b) plan.
Code DD – Cost of employer-sponsored health coverage. (This amount reported with Code DD is not taxable).
Health Savings Account (HSA)
Box 12 (Code W) also 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.
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:
- UW Retirement Plan (UWRP)
- Public Employees’ Retirement System 1, 2 or 3 (PERS)
- Teachers’ Retirement System Plan (TRS)
- Law Enforcement Officers’ and Fire Fighters’ (LEOFF)
If you are a participant, box 1 – “Wages, Tips and Other Compensation” has been reduced by your retirement plan contributions (including elective pre-tax deferral to VIP but not 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.
Health coverage reporting on an IRS 1095 Form
An “IRS 1095 form” is your “proof of insurance.” IRS 1095 forms are filed by the Health Insurance Marketplace (1095-A); by other insurers (1095-B); or by your employer (1095-C). Your, 1095 form(s) are filed by whomever provided your coverage during the year – individuals do not fill these forms out themselves.
UW employees will receive their 1095 form from either the state Health Care Authority (HCA) or directly from your health plan (see details below).
If you are an employee enrolled in a PEBB Uniform Medical Plan: The HCA will send your 1095 form to your home address. This form indicates (by month) whether or not you had health coverage during 2016, and will list any enrolled family members.
If you are an employee enrolled in a PEBB Kaiser WA or Kaiser Permanente NW Plan: You will receive your 1095 form directly from Kaiser Permanente which indicates (by month) whether or not you had health coverage in 2016, and will list any enrolled family members.
If you are a Graduate Appointee Insurance Plan participant: You will receive your 1095 form directly from Lifewise indicating (by month) whether or not you had health coverage during 2016, and listing any enrolled family members.
For detailed information regarding these forms and your tax returns, please refer to the IRS web site.
When will I receive my 1095 form? The 1095’s will be distributed in March. As a result, individuals might not receive a 1095 by the time they file their 2016 tax returns. However, the form is not required to file taxes.
Uniform Medical Plans: For those in any of the Uniform Medial plans, the state Health Care Authority will create and mail Form 1095. Please note that the HCA will use the UW Benefits return address for the mailing, but the document is developed and distributed by HCA.
Kaiser WA & Kaiser Permanente NW: The insurers will mail Form 1095.
Graduate students in GAIP: LifeWise will mail Form 1095.
Should I wait to receive my 1095 form? If you are expecting to receive a Form 1095-A, you should wait to file your 2016 income tax return until you receive that form. However, it is not necessary to wait for Forms 1095-B or 1095-C in order to file.
Who needs a 1095 form? Individuals who wish to file for a Premium Tax Credit will need a 1095 form. (Note: If you are filing the Premium Tax Credit form, you can’t file a 1040 EZ form and will need to file a traditional 1040 or 1040-A).
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 who were legally married in jurisdictions that recognized their marriages, were to be treated as married for federal tax purposes. (These couples may also be known as Qualified Domestic Partners (QDPs) under Washington State law). 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. 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 about qualified domestic partner tax status, see the HCA’s Dependent Verification information.
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.
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.