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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.


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?


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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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