W-2 Box 11 matched Box 12C

[catchick]

I don't understand how to answer the question for W-2 Box 11 regarding whether it is money contributed to or money taken out of a nonqualified plan. I don't see how it is either, as it relates to excess (>$50k) group term life insurance paid by the employer.  Please advise.

[SusanY1]

It sounds like there is an entry error for the W2.  Return to the entry area for Wages & Income and select edit beside the W2.  Then remove the entry from box 11 and enter the data in box 12, with code C for the excess life insurance.  This should clear the error for you.

[catchick]

Thanks for your reply.

Would the employer need to provide a corrected W-2 since thats how the numbers are reported on the official W-2? I'm not comfortable erasing their entry without it being official.

Just as an FYI: It was reported this way in 2022, so I don't think it is a reporting error (especially with this employer).  I don't recall answering this Box 11 question last year.

Assuming it is reported correctly in Box 11, how is an employer paying Life Insurance on my behalf considered a nonqualified plan distribution or contribution? If I were to answer the question for Box 11, how would you advise I answer it? 

Finally, how does TurboTax use the answer in Box 11 to complete my taxes? In other words, would a wrong answer have an impact on taxable income/taxes owed?

[ThomasM125]

This is what is mentioned on the instructions for box 11 on a W-2 form:

So, it relates to a retirement plan. TurboTax needs to know if it is a contribution to or distribution from your retirement plan:

 I suggest you ask your employer if it is a contribution or distribution.  I cannot say how it would affect your tax return since I don't know what entries are on it.

[TaxQuestionsTX]

Please interpret the tax code for us and let us know how to answer TurboTax's question.

This is not an employer questions.  The question is whether or not employer-paid life insurance premiums for a retiree, to give coverage over the $50K limit, are considered a distribution from a non-qualified plan or considered a contribution a non-qualified plan.  The amount is premium paid by a (former) employer to a retiree.  The retiree is not receiving money.  The retiree is not paying money.  Nor is the retiree contributing to their non-qualified plan.  TurboTax should add the question as to whether this is for a employer-paid life insurance and then apply the tax law appropriately.

Please interpret the tax code for us and let us know how to answer TurboTax's question.