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A 35 year old principal receives $250,000.00 of board paid group term life insurance for an entire calendar year. 
Image AddedThe amount of excess coverage over $50,000.00 is used to determine the taxable coverage. In this example the amount of taxable coverage would be $200,000.00.

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• If the employee is responsible for paying their portion of Medicare, the following adjustments will need to be created:
  • Go to Core>Adjustments.  
  • Click Create.
  • Enter the Employee, Payroll Item 692, Type of Amount Withheld, a Transaction Date, Amount equaling the calculated Medicare amount, and a Description for future reference.
  • Click Save.
  • Go to Core>Adjustments.
  • Click Create.
  • Enter the Employee, Payroll Item 692, Type of Board's Amount of payroll item, a Transaction Date, Amount equaling the calculated Medicare amount, and a Description for future reference.
  • Click Save.

Example:

Life Insurance amount of cost is $100.00.  Medicare Amount would calculated as $100.00 x .0145 = $1.45.  Adjustments would need to be posted as follows:

• $1.45 Amount Withheld for 692
• $1.45 Board's Amount of payroll item for 692

• If the Medicare is fully board paid (referred to as Medicare Pickup), adjustments will need to be created.  (Board will need to pay for both Employee and Employer portion of Medicare.) 
  • Go to Core>Adjustments.  
  • Click Create.Enter the Employee, Payroll Item 001, Type Life Insurance, a Transaction Date, Enter the Amount of the Life Insurance, and a Description for future reference.
  • Enter the Employee, Payroll Item 692, Type of Board's Pickup Amount of Payroll Item, a Transaction Date, Enter the Amount of the board pickup, and a Description for future reference.
  • Click Save.
  • Click Create.
  • Enter the Employee, Payroll Item 692, Type of Applicable Gross, a Transaction Date, Enter the Amount of the Life Insurance, and a Description for future reference.
  • Click Create.
  • Click Save.
  • Enter the Employee, Payroll Item 692, Type of Board's Amount of payroll item, a Transaction Date, Amount equaling the calculated Medicare amount, and a Description for future reference.
  • Click Save.

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Example-:

Life Insurance amount of cost is $100.00.

$100.00 Life Insurance cost/ 98.55% = $101.47 Applicable Gross

$101.47 x .029 (.0145 x 2) = $2.94 /2= Medicare Pickup Amounts

$1.47 for each the Employee (being paid by the board as pickup) and Employer amount. 

$101.47 - $100.00 = $1.47 Applicable Gross Adjustment

$1.47 Is the amount of the Board Pickup Amount of the Payroll Item.  This will update both Medicare Pickup for $1.47 and Medicare for $1.47 on the Employee's W2.

$1.47 Is the amount of Board's Amount of payroll item'.  This will update the 941 Quarter report 'QTD Employer's Medicare Contribution.' 

$1.47 Is the amount of Applicable Gross. This will update the employee's W2 Taxable Gross for Medicare.

Adjustment records needs that need to be created:

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