Harold Biggs is provided with $200,000 coverage under his employer's group-term life insurance plan. Which of the following statements is true?

Question

Quizplus · Accepted Answer

According to the IRS, the cost of group-term life insurance coverage exceeding $50,000 must be included in an employee's gross income, and is subject to Social Security and Medicare taxes. Therefore, in this case, the value of the cost of $150,000 coverage would be included in Harold's gross income. The cost of the first $50,000 of coverage is not included and is considered a nontaxable fringe benefit.

Harold Biggs Is Provided with $200,000 Coverage Under His Employer's