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Betty has group term life insurance coverage that is equal to four times her annual salary...

Betty has group term life insurance coverage that is equal to four times her annual salary of $150,000 per ear by her employer. Betty did not pay anything towards the cost of her insurance. How much does Betty need to include in her 2020 gross income?

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Answer #1

Group Term life insurance is an exempt Fringe benefit but upto $50000.The first $50,000 of group-term life insurance coverage the pay for is excluded from each employee's taxable income. If you pay for more than $50,000, you must include the excess in the employee's taxable income.

In the given scenario Group term life insurance is 4 times the annual salary of $150000 which is equal to $600000(150000*4).

Betty need to include in her Gross income $550000($600000-$50000) for 2020.

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