Is cost of company-paid life insurance considered earned inc
The cost of company paid life insurance above $50000 is considered income and they put that on my W-2. Can this amount (about $5400) be treated as earned income so to allow me to contribute to my roth IRA ? Thanks.
Permalink Submitted by Alan Spross on Wed, 2011-03-16 22:30
Yes. SInce this amount is shown in Box 1 of the W-2 and is NOT shown in Box 11, it is considered earned income for purposes of an IRA contribution.
Permalink Submitted by Yungti Yin on Wed, 2011-03-16 23:04
Thanks.
Permalink Submitted by Meggy Brookson on Mon, 2011-03-21 03:11
Are you sure? I thought it depended on what kind and the amount. There’s a few articles on the site http://www.lifeinsurancequotes.org about tax stuff – hope that helps anyone else reading this a bit confused…
Permalink Submitted by Alan Spross on Mon, 2011-03-21 03:35
The company paid life insurance is coded with Code C in Box 12 of the W-2.
But it really does not matter, because if you have a W-2 where Box 1 less Box 11 is positive, it is a safe harbor for earned income to make an IRA contribution. The only problem would be if the W-2 itself is incorrect.