Final answer:
BOX 12 CODE on a W-2 indicating 'Uncollected Medicare tax on the value of GTL insurance > $50,000' refers to a taxable benefit related to life insurance where the value of employer-provided insurance exceeds $50,000, leading to additional Medicare tax obligations being reported.
Step-by-step explanation:
On a W-2 form, if you see BOX 12 CODE "Uncollected Medicare tax on the value of GTL insurance > $50,000", it implies a taxable benefit related to life insurance. This indicates that the employee had group-term life insurance coverage provided by the employer that exceeded $50,000, and the value of the coverage above that threshold is treated as a taxable benefit to the employee, requiring the reporting and accordingly taxed on Medicare.
Deductions from an employee's wages, such as withholding tax, generally cover payments like income tax, social security contributions, and various insurances, including unemployment and disability. Specifically, an employee sees 1.45% deducted from their paycheck for Medicare. Employers also pay a matching 1.45%, which may be indirectly passed on to employees through lower wages, effectively implying that the total payroll taxes are borne by the employees.