What does BOX 12 CODE 'C' signify in payroll reporting?

In payroll reporting, BOX 12 CODE 'C' specifically signifies the value of group term life insurance (GTL) coverage that exceeds $50,000. This is important for tax purposes, as the IRS requires employers to disclose this value on the employee's Form W-2.

The amount of the GTL coverage over $50,000 is considered taxable income to the employee and must be included in their taxable wages. This ensures that employees are aware of any additional taxable benefits they may be receiving from their employer. It also allows the IRS to properly account for these benefits in the determination of an employee's income tax obligations.

Understanding the nuances of BOX 12 codes is crucial for payroll professionals, as proper reporting affects both compliance with tax regulations and the overall financial implications for employees regarding their reported income.