My company pays $1,200 per month for my health care benefits. I was told that this will be real income and taxed as such in 2011. Is this true?
Since the health care reform bill was enacted this question has come up often. In fact, the rumor that your health insurance will now be taxable is not true.
It is true that beginning next year employers will report the amount that they pay for your health insurance on your W-2. Employer-paid health insurance will be a line item, just like other line items you may be familiar with such as the amount you contribute to your 401(k). However this amount will not be included in taxable income. The figure is there for reporting purposes only to the IRS.
So rest easy, your will not be taxed on your company-paid health insurance.
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