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Life Insurance and Section 79


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I need help deciding if the plan below is a straddle plan/carried by the employer, and therefore company should be imputing income and withholding payroll taxes.

Facts:

Assume there is no company paid basic life benefit. Company offers voluntary life insurance to all F/T employees. Employees pay the same rate per $1,000 of coverage, regardless of age. The company rate is $.25 / 1,000. When compare to Table 1 rates I see that the company rate is less than Table 1 rate for employees ages 55+.

Based on these facts, may I conclude that for employees ages 55+ with more than $50,000 of coverage, the company should be imputing income and withholding FICA? And the imputed income/fica would be on only coverage in excess of $50,000 and calculated as the difference between what the cost would have been under Table one and the actual employee contributions?

Thanks

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Assuming the employees who "elect" this voluntary coverage are having their premiums deducted from their pay as after-tax deductions I don't see how this can be considered a section 79 group term life insurance plan or there can be any imputed income.

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