2021 Imputed Income Worksheet Now Available

If your cooperative offers group term life insurance (either through the NRECA Group Benefits Program or another group insurance plan), don’t forget to report imputed income on employees’ 2020 W-2 forms.

Life insurance imputed income worksheets for both 2020 and 2021 are now available on the Employee Benefits website. If you report imputed income once at the end of the year, use the 2020 worksheet. Use the new 2021 worksheet if you plan to impute income for each pay period during the upcoming year. New information and frequently asked questions are also available on the imputed income page of the BA Guide. You’ll also find helpful links to Internal Revenue Service resources on the topic.

Employers must calculate and report imputed income for the taxable value of group term life insurance above an employee’s first $50,000 of coverage (including supplemental, spouse, and child life coverage). Even though employees don’t receive cash, they’re taxed on the value of this additional coverage. Internal Revenue Code §79 contains the rules and rates.

Remember, these tools are provided to help you with your calculations; however, they are not intended as tax or legal advice. Consult your co-op’s tax advisor or legal counsel to confirm your co-op’s imputed income reporting requirements. 

If you have any questions about imputed income, contact the group compliance team at 866.673.2299, option 7, or group.compliance@nreca.coop.