Imputed income is the taxable amount of group term life insurance when the value of the benefit exceeds $50,000. This amount must be reported as compensation (on the employee’s W-2) and is subject to Social Security, Medicare tax, and if applicable, Medicare surtax.

Download our Taxability of Employer-Provided Group Term Life Insurance Benefits guide to learn:

• What is imputed income
• What are the 4 requirements for providing group term life insurance coverage on a tax-free basis
• How to calculate the imputed cost
• What type of group term life insurance plans are subject to imputed income rules
• How to avoid imputed income