Learn how to set up Group-Term Life Insurance (GTLI) in your QuickBooks Online Payroll and QuickBooks Desktop Payroll to report it on your payroll forms like W-2.
Group-Term Life Insurance is a benefit you can provide to your employees. If this benefit exceeds $50,000 for an employee, the excess amount must be reported as income and is subject to Social Security and Medicare taxes. Visit the IRS website to learn more.
Here’s how to report the Group Term Life Insurance amounts on your employees paychecks and tax forms.
Note: Not sure which payroll service you have? Here's how to find your payroll service.
Step 1: Set up a payroll item for Group-Term Life Insurance (GTLI)
QuickBooks Online Payroll QuickBooks Desktop Payroll There are 2 tax tracking types you can use when you set up GTLI company contributions.
Step 2: Report GTLI wages to paychecks and forms
How it's reported on federal forms:
- 941: Boxes 2, 5a, 5c
- 940: Boxes 3, 4, and 4b checked
- W-2: Boxes 1, 3, 5 and $ amount in box 12 with code C
QuickBooks Online Payroll As you run your scheduled payroll, enter an amount in the GTL field. Or run a fringe benefits only paycheck. QuickBooks Desktop Payroll Run your scheduled or unscheduled payroll. In the Other Payroll Items section, add the GTLI item and the amount.
Track GTLI wages
Note: GTLI wages won’t create additional tax withholding when included on paychecks, but will be reported as taxable wages on tax forms, such as Form W-2. Because of this, these amounts will appear as "Excess Wages" for Federal and State income tax on the Tax and Wage Summary report. These aren't true "Excess Wages". Refer to the "Total Wages" column for the total taxable wages.
If you need to track GTLI wages, check out Run payroll reports in QuickBooks Online Payroll and QuickBooks Desktop Payroll.