Post by TonyV on Dec 5, 2010 16:35:44 GMT -5
Hello, I would like to bring your attention on a new post published on the
UAWLAP.org Site.
Details of the post follow.
In Solidarity,
Steven M. Stone
Additional Taxable Income – Group Life Insurance Over $ 50,000
Federal law requires that the Company report to the Internal Revenue Service,
under Section 79, the "imputed income" of certain Company-paid benefits,
including Group Life Insurance that exceed $ 50,000. Imputed income represents
the value of "in kind" compensation not actually received as wages but having
value to the member. This income is subject to Federal, State, Local and Social
Security (FICA) taxes and is reportable on W-2 forms.
This imputed income is also referred to as "Additional Taxable Income" or ATI.
Exceptions
Exclusions from imputation will be applied in the following situations only:
(1) The member/retiree named a charity as their beneficiary. The member must
notify the carrier of qualifying charity and request "EXEMPT" from Imputed
Income "in writing" in addition to the beneficiary form.
(2) The retiree is disabled as defined by a retirement code.
(3) The retiree was born on or before January 1, 1929.
(4) The retiree retired on or before January 1, 1984.
Hourly Active Members
The Group Life Insurance over $ 50,000 will show on the November 27th pay
ending check, which will be distributed December 2nd. Per the member's check
stub, 'GPLIFE UPD TXS' is the code used to identify ATI for 2010. Although
subject to Federal taxes, Federal taxes will not be withheld but Medicare,
State, FICA and City withholding will apply. Hourly active members who have no
dependents will have imputed income calculated based on their amount of life
insurance alone; members who have a spouse or dependent children who would
qualify for the Survivor Income Benefit (SIB) will have imputed income
calculated based on the value of their life insurance plus the value of the SIB.
The value of SIB is an actuarial value provided by the insurance carrier. The
value of the SIB (ranging from $ 8,518.40 to $ 92,166.15 if the member has a
spouse and/or child), depends on the spouse's age and/or the age of the youngest
dependent. Depending on the member's personal situation, sometimes the life
insurance value
alone will not exceed $ 50,000; but the value of the life insurance plus the SIB
will exceed $ 50,000, resulting in imputed income.
Hourly Retirees
Retirees with imputed income will see it reflected on their 2010 Form W-2, box
12C.
The W-2's will be mailed to retirees before January 31, 2011.
Questions
Hourly active members and retirees should call UniCare at 1-800-843-8184 Option
2 if they have any questions. Most questions involve information contained in
this memo. In most cases, active members should be advised that the value of
their life insurance added to the value of their Survivor Income Benefit has
caused them to exceed $ 50,000. Also, active members with the same amount of
life insurance may have different imputed income due to age and if they have
dependents. Members who retire in 2010 will have a partial year calculated as
active with life insurance and SIB, and a partial year calculated as a retiree
with only life insurance. Members who die in 2010 will have imputed income
calculated through the month of death.
If the member or retiree feels their amount is incorrect or if they request a
breakdown on the calculation, they can call UniCare to obtain detailed
information.
Jim Fisher Jr.
Union Benefits Representative
UAW Local 862
Louisville Assembly Plant
phone (502)969-3286
Link to the post:
uawlap.org/building-chairpersons-report/committees/benefits-rep-report/additional-taxable-income-%e2%80%93-group-life-insurance-over-50000.php
Link to UAWLAP.org: uawlap.org
UAWLAP.org Site.
Details of the post follow.
In Solidarity,
Steven M. Stone
Additional Taxable Income – Group Life Insurance Over $ 50,000
Federal law requires that the Company report to the Internal Revenue Service,
under Section 79, the "imputed income" of certain Company-paid benefits,
including Group Life Insurance that exceed $ 50,000. Imputed income represents
the value of "in kind" compensation not actually received as wages but having
value to the member. This income is subject to Federal, State, Local and Social
Security (FICA) taxes and is reportable on W-2 forms.
This imputed income is also referred to as "Additional Taxable Income" or ATI.
Exceptions
Exclusions from imputation will be applied in the following situations only:
(1) The member/retiree named a charity as their beneficiary. The member must
notify the carrier of qualifying charity and request "EXEMPT" from Imputed
Income "in writing" in addition to the beneficiary form.
(2) The retiree is disabled as defined by a retirement code.
(3) The retiree was born on or before January 1, 1929.
(4) The retiree retired on or before January 1, 1984.
Hourly Active Members
The Group Life Insurance over $ 50,000 will show on the November 27th pay
ending check, which will be distributed December 2nd. Per the member's check
stub, 'GPLIFE UPD TXS' is the code used to identify ATI for 2010. Although
subject to Federal taxes, Federal taxes will not be withheld but Medicare,
State, FICA and City withholding will apply. Hourly active members who have no
dependents will have imputed income calculated based on their amount of life
insurance alone; members who have a spouse or dependent children who would
qualify for the Survivor Income Benefit (SIB) will have imputed income
calculated based on the value of their life insurance plus the value of the SIB.
The value of SIB is an actuarial value provided by the insurance carrier. The
value of the SIB (ranging from $ 8,518.40 to $ 92,166.15 if the member has a
spouse and/or child), depends on the spouse's age and/or the age of the youngest
dependent. Depending on the member's personal situation, sometimes the life
insurance value
alone will not exceed $ 50,000; but the value of the life insurance plus the SIB
will exceed $ 50,000, resulting in imputed income.
Hourly Retirees
Retirees with imputed income will see it reflected on their 2010 Form W-2, box
12C.
The W-2's will be mailed to retirees before January 31, 2011.
Questions
Hourly active members and retirees should call UniCare at 1-800-843-8184 Option
2 if they have any questions. Most questions involve information contained in
this memo. In most cases, active members should be advised that the value of
their life insurance added to the value of their Survivor Income Benefit has
caused them to exceed $ 50,000. Also, active members with the same amount of
life insurance may have different imputed income due to age and if they have
dependents. Members who retire in 2010 will have a partial year calculated as
active with life insurance and SIB, and a partial year calculated as a retiree
with only life insurance. Members who die in 2010 will have imputed income
calculated through the month of death.
If the member or retiree feels their amount is incorrect or if they request a
breakdown on the calculation, they can call UniCare to obtain detailed
information.
Jim Fisher Jr.
Union Benefits Representative
UAW Local 862
Louisville Assembly Plant
phone (502)969-3286
Link to the post:
uawlap.org/building-chairpersons-report/committees/benefits-rep-report/additional-taxable-income-%e2%80%93-group-life-insurance-over-50000.php
Link to UAWLAP.org: uawlap.org