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.
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.
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?
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.
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.