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The Online Advisor - March 1999
IRS revises tables for group term life insurance
Employers can provide up to $50,000 of group term life insurance coverage as a nontaxable benefit for employees. The cost of employer-paid coverage in excess of $50,000 is considered taxable income to the employee and must be reported on an employee's W-2.
Recently, the IRS proposed revising the rates used to determine the amount of income that must be reported when coverage exceeds $50,000. The new rates reflect the decrease in insurance costs resulting from longer life spans.
The proposed rates follow:
|
|
Under 25 |
$0.05 |
|
Employers should take these changes into account and make any necessary payroll adjustments before the proposed July 1, 1999, effective date. For details or assistance, contact our office.