Life Insurance Imputed Income

Imputed income is the dollar value that IRS puts on the amount of group term life insurance coverage in excess of $50,000. The imputed income occurs when individuals with more than $50,000 of life coverage volume insurance pay less for the coverage than the IRS has determined to be worth, as per the uniform premium table.

Under Section 79 of the Internal Revenue Code, employer provided group life coverage will generate additional taxable income to the employee.

Under current tax laws, you are required to pay income taxes on the "value" of your company provided basic life insurance coverage in excess of $50,000. The "value" is determined by your age and schedule established by the IRS (see table below). This tax liability is called "imputed income." It is added to your gross wages and is included on your form W-2 at the end of the year.

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  • Imputed Income