Affordable Care Act, W-2 changes and untaxed income

Paying for College
1

<p>I noticed on my W-2 that I just received that there is a new entry this year in Box 12, which is where many forms of untaxed income are reported. This year, there is a new code "DD", which shows the value of employer sponsored health coverage. </p>

<p>Form</a> W-2 Reporting of Employer-Sponsored Health Coverage</p>

<p>This amount that is reported with code DD is not taxable, nor is it considered untaxed income. </p>

<p>However, the code "D" in box 12 refers to the amount an employee contributes to their 401K Plan. Financial aid administrators add this amount back on top of AGI to determine the "financial aid income" that gets assessed. It makes me wonder how much training financial aid administrators will get on this new change. I wouldn't be surprised to see some uninformed aid administrators mistakenly adding amounts reported under code DD back in as assessable income.</p>

2

<p>I am thinking that in order for financial aid administrators to do so, this amount has to show up on FAFSA and/or CSS. Since you will not be putting those numbers in on the financial aid forms, I suspect that you will be fine. </p>

<p>I am more concerned about what Congress would want to do with this amount, once they gather sufficient data.</p>

3

<p>Many profile schools and schools with their own finaid forms require W-2s be sent in as documentation but I expect the finaid departments will ignore this correctly.</p>