Tax Cuts for Workers with Term Life
Workers whose employers offer group term life-insurance coverage will receive a tax cut according to a plan unveiled earlier this year by Treasury officials. The move has drawn applause, although debate recently has heated up about the proposed regulation's effective date of July 1. Some companies suggest changing that date to the start of this year, but the American Payroll Association wants a six-month delay, to the start of next year.
Administration officials expect to make a decision soon. Under current law, the cost of the first $50,000 of employer-provided coverage generally is tax free. Anything over that sum is included in taxable income, after subtracting what the worker paid toward buying it.
The Treasury has issued a new insurance-cost table that effectively cuts the amount of this imputed income.