What Is The Employee's Income Tax Liability On Employee Owned Life Insurance?

For Federal Tax purposes an employee must include in income the cost (based on the IRS uniform premium cost tables) of more than $50,000 of group-term life insurance, provided by the employer (Code Sec. 79; Reg. Ss1.79-1-Reg. Ss1.79.3) An employee's age is determined on the last day of the employee's tax year. There is no FICA or Medicare on this amount only if the benefit is over $50,000 the cost for that portion is included on the employees W-2 and income tax as income.