Must Employers Report QSEHRA Benefits on Form W-2?

In short, yes. If an employee was covered under a qualified small employer health reimbursement arrangement (QSEHRA), the employer must report the total amount of the employee’s permitted QSEHRA benefit on Form W-2 in Box 12, using Code “FF”.

IRS Guidelines

IRS guidance clarifies that an employer must report the amount of payments and reimbursements that the eligible employee is entitled to receive from the QSEHRA for the calendar year (the employee’s “permitted benefit”), without regard to the payments or reimbursements actually received. (For 2018, the maximum permitted benefit for an eligible employee under a QSEHRA is $5,050 for self-only coverage and $10,250 for family coverage)

The permitted benefit reported on Form W-2 includes only newly available amounts. Thus, if the QSEHRA allows carryovers of unused amounts from prior years, any available carryovers would not be reported.

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