What does Box 12 Code "M" denote in tax documentation?

Box 12 Code "M" in tax documentation specifically denotes uncollected Medicare tax on the value of group term life (GTL) insurance that exceeds $50,000. This coverage can result in tax implications for employees, as the portion of the GTL that is above the threshold is considered taxable income, leading to possible uncollected taxes if not withheld correctly.

This code is important for ensuring that taxpayers are aware of their tax liabilities concerning their employer-provided benefits. Understanding this code helps payroll professionals and taxpayers to accurately prepare their income tax returns and ensure compliance with IRS regulations regarding reported benefits. The presence of such codes empowers employees to recognize the implications of their fringe benefits on their taxable income and the associated tax obligations.