How are employer-paid premiums for an employee's group term life insurance up to $50,000 treated for tax purposes?

Employer-paid premiums for an employee's group term life insurance up to $50,000 are not taxable to the employee. This treatment is based on IRS guidelines, which state that the cost of up to $50,000 of group term life insurance coverage provided by an employer is generally excluded from the employee's taxable income.

This means that employees do not have to report these premiums as income, making it a valuable benefit that does not incur income taxes. Additionally, this exclusion applies specifically to the first $50,000 of coverage; any amount over that limit may be subject to imputed income calculations, which could then become taxable.

This tax advantage encourages employers to offer life insurance as part of their benefits package, as it provides financial security for employees and their beneficiaries without additional tax burdens.