Are employer-paid group legal plans taxable to the employee-participan

[Guest SCUDDESLER]

It is my understanding that Code Sec. 120 (for taxable years beginning on or before June 30, 1992) permitted an employer to purchase legal services for its employees though a qualified group legal services plan and that the employees were not taxed on the value of that benefit so long as the benefit did not exceed $70 per employee. However, if an employer sponsors a group legal services plan for a tax year beginning after June 30, 1992 (irrespective of whether the plan would be "qualified" under Code Sec. 120), the value of the benefit is imputed to the employee-participants. Is my position correct? If so, what are the tax benefits to employees of employer-sponsored group legal services plans? Thank you for your responses.

[This message has been edited by Sheila K (edited 01-27-2000).]

[Guest Phil Cohen]

You correctly point out that Sec 120 has faded into the sunset.

For programs not falling under Sec 120 there is no imputed value of the benefit to the employee when a prepaid legal plan is paid 100% by the employer.

Feel free to contact me if you would like further clarification.

Thanks,

Phil Cohen

Broad Reach Benefits, Inc.

pcohen@brb1144.com