indemnity insurance boston

total coverage

IRC Section 79 is an exclusion for the first $ 50000 group term life insurance under a policy directly or indirectly by the employer. There are no tax consequences if the total amount of this policy is not more than $ 50000th The imputed cost of the coverage of more than $ 50000, the income to the IRS Premium Table, and after social security and Medicare taxes.

Developed, directly or indirectly by the employer

A fringe benefit tax, whether the coverage of more than $ 50000 and politics is seen as LED directly or indirectly by the employer. A policy will be led directly or indirectly by the employer if:

1. The employer pays all costs for the life insurance policy, or
2. The employer is responsible for the payment of premiums and premiums received from at least one employee to subsidize the payments by at least one other employee (the "Straddle" rule ").

The determination of whether the fees associated premium costs se basa en el IRS Schedule premium prices, not actual costs.

As the employer the cost of the premium by the grant and / or redistribution of the paper, there is a benefit for the employees. This benefit is taxable, even if employees pay the full cost will be charged. You need to calculate the taxable portion of the premiums for the coverage of more than $ 50000th

No leads directly or indirectly by the employer

A policy which is not a LED directly or indirectly by the employer has no tax consequences for the employee. Since the employees are paying the cost and the employer is not the redistribution of the cost of premiums by an insurance scheme, the employer has no reporting requirements.

Example 1 - All employees of X are the employers in the 40 to 44 years old. According to the IRS Premium Table, the cost is .10 per thousand. The employer pays the entire cost of insurance. If at least one employee more than, 10 per thousand of coverage, and at least one is less than 10, as is coverage by the employer. Therefore, each employee, social security and Medicare tax on the cost of coverage over $ 50,000.

Example 2 - The facts are the same as Example 1, except for all workers who pay the same, which is facilitated by the third party insurers. The employer pays nothing towards the coast. Therefore, there is no taxable income of the employee. No matter what it is, because the employer does not subsidize the cost or the employees under him.

The collection of more than one insurer

Generally, if there is more than a policy of equal insurance coverage for employees, a combined test is used to determine whether they directly or indirectly by the employer. However, the Regulation provides exceptions, the measures to be analyzed separately if the cost and scope may be between the two policy areas. See Regulation 1.79 for further information.

If coverage is more than one insurer, each must be tested separately to determine whether it is directly or indirectly by the employer.

Coverage for spouses and dependents

The costs for the employer group, the duration of life in the life of a worker's spouse or dependent will be paid by the employer is not taxable to the employee, if the face amount of coverage does not exceed $ 2000. This coverage is not as "de minimis fringe benefit.

Regardless of whether the expected benefit is de minimis depends on all facts and circumstances. In some cases, an amount of more than $ 2000 can cover as a de minimis benefit. See Notice 89-110 for more information.

If a part of the care of a spouse or dependent is taxed in the same table is seen as a premium for the employee. The total amount is taxed, not just the amount of more than $ 2000.

Example 3 - A 47-year-old employee receives $ 40,000 per year, a policy directly or indirectly by his employer. She is also entitled to up to $ 100,000 for voluntary insurance at their own expense. This amount is also determined by the employer. The cost of 10000 U.S. dollars, this amount is excluded, the cost for the remaining $ 90,000 in income. If the optional is not authorized by the employer, not the cover is $ 100000 in income.

Waldo Bardado writes for whole life. provides detailed information on life, Life Insurance Companies, Life Insurance News and more. please visit http://www.surelife.biz.