What is Group-term life insurance?
In short
Employees can exclude the cost of employer-provided group-term life insurance coverage up to $50,000. The cost of coverage above $50,000, based on an Internal Revenue Service table, is included in wages.
Key takeaways
- Any amount the employee pays toward the coverage reduces the taxable amount.
- If the plan favors key employees, they lose the exclusion.
- Death benefits paid to beneficiaries are generally excluded from income.
Where it's tested
REG: Individual Taxation: Gross Income — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which of the following items is included in a taxpayer's federal gross income?