End of Year Reporting Update: Group Life Insurance Imputed Income
It’s December, which means time is running out for you to report your company’s group life insurance imputed income to Uncle Sam. Many companies don’t realize offering employees an employer-paid group term life insurance policy in excess of $50,000 is considered a fringe benefit by the Internal Revenue Service (IRS). Employers are required to report any life insurance coverage over that amount on an employee’s W-2 as taxable income. Typically, this is a minimal change to the employee’s taxable wages. The amount to be reported on the W-2 is based on an IRS table associated with group term life insurance. The deadline for reporting life insurance imputed income is usually with the last payroll of the year; however, you should check with your payroll provider for further details or requirements.
How does your company handle the tab for group term insurance? We’d love to hear about it.Contact Us today for an honest conversation about benefits coordination and to see if our HR Partnering Services are a viable solution for your company.