Employer-provided Life Insurance as Imputed Income

As an employer, you’re likely aware of the requirement of managing and calculating “imputed income” for your employees.  This requirement of the IRS applies to employees who are covered by an employer-provided benefit of more than $50,000 in term life insurance.  This requirement is tedious and challenging, especially if you have a payroll or software service, however it is one that must be administered.  This article from Mutual of Omaha outlines the specific criteria for calculating imputed income for employer-paid term life insurance.  The article also includes something employers may NOT be aware of… the requirement of calculating imputed income for employee-paid (or voluntary) term life plans.  Certain voluntary plans, even those with benefits in flat increments (e.g. – $5,000, $10,000) that are paid for with after-tax dollars must still meet the requirements and filing laws of Section 79 of the IRS Code.  See the full article from Mutual of Omaha for further details.

Click this link to our contributor, Millennium Benefits Consulting, for the complete Mutual of Omaha article, “Understanding Life Insurance and Imputed Income”.



Author: Millennium Benefits Consulting

Millennium Benefits Consulting (MBC) is an Atlanta-based employee benefit and consulting brokerage firm that was incorporated in 1988. As a privately held, family-oriented organization, MBC stands apart from other consulting houses and brokerage firms because of our passion and talent for creating customized benefit solutions. The MBC team is comprised of associates with a variety of professional backgrounds and related areas of expertise, ranging from large national health insurance carriers to human resource departments. Having dealt extensively with both sides of the healthcare/benefits equation, MBC is uniquely qualified to develop benefit solutions that are valuable for employees, while making the most efficient use of the employer’s resources. Learn more about MBC at www.mbcllc.com. View all posts by Millennium Benefits Consulting →

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