Changes in Employee Health Benefits

One area of changes for farmers or ranchers with employees in the New Year is that the Affordable Health Care is now in affect and there are now taxes on employees’ health benefits. CliftonLarsonAllen Principle and Farm CPA Today Blogger Paul Neiffer has a reminder for farmers and ranchers with employees with health benefits.

Neiffer: “A lot of our farmers and other employers out there are actually going to have to treat that medical insurance or that reimbursement as taxable wage income to the employee. The thing is if you do it and you make that payment and you don’t treat it as taxable wage to the employee the farmer is potentially subject to a $100 a day penalty for however long they provided that coverage to that employee. The drawback is or the solution may be that the farmer is going to have to include that $5,000 or $3,000 as taxable income to the employee and put it on their W2 — subject to FICA, subject to Medicare, subject to income tax withholding. Farmers just need to be aware of that.”

Farm CPA Today is one of my favorite informative blogs, if you haven’t yet visited it, go to Farm CPA today.com.