Figure Out Tax Perks of Group Term Life — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
Q. I am starting work for a second employer while retaining my existing job. Both companies provide group term life insurance coverage. Does the $50,000 tax-free limit apply to each one?
A. No. An employee may receive up to $50,000 of employer paid, group term life insurance as a tax-free fringe benefit. Any excess is taxable to employees under IRS-prescribed tables. This $50,000 tax-free cap applies to total coverage from all employers that provide simultaneous coverage. If two or more employers provide insurance coverage exceeding $50,000, the amounts reported as wages on your W-2s for 2008 will be too low.