Tax advantages and cost effectiveness continue to make group-term a popular benefit

Article Abstract:

Group-term life insurance is offered as an employee benefit by large and small companies alike, and the employees who take advantage of such employer-paid policies realize income tax benefits from such policies, while their eventual beneficiaries also realize tax-free income upon the employee's death. The details of such arrangements and the tax rules and regulations in this area are discussed in detail, including: premium payment limitations, discrimination rules, insurance coverage that exceeds $50,000 and cafeteria benefits plans. Also discussed are tax planning considerations for those employees benefiting from group-term life insurance coverage.

Author: Connell, John, Kosnar, Barbara
Life insurance, Insurance policies

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Discrimination rules of Section 89 require careful review of employee benefit plans

Article Abstract:

Section 89 of the Internal Revenue Code addresses the discrimination rules regarding employee fringe benefits programs. The basic qualification standards under Section 89 include provisions that the plan must be in writing, be enforceable, be for the exclusive benefit of the employees, have an indefinite maintenance period, and employees must be aware of their benefits. The discrimination tests include the 80% alternative test and eligibility and benefits tests. Further information is provided on the valuation of benefits and recommendations for assessment.

Author: Myott, James L.
Research, Tax accounting

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Meal money may be a taxable fringe benefit

Article Abstract:

TAM 9148001 classifies regular employee meal allowances as wages and as such liable to income tax and Federal Insurance Contributions Act withholding. Only meal allowances that are given occasionally qualify as de minimis fringe benefits, and are therefore not considered taxable income. Employers who routinely give meal allowances believing that they are tax-freewill still be required to withhold income tax and federal insurance contributions.

Laws, regulations and rules, Income tax

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Subjects list: Taxation, Employee benefits
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