Imputed Income (Additional Taxable Income)


Your University-paid Basic Life insurance will be taxable income to the extent that the amount for which you are insured exceeds $50,000. Note: Imputed income increases with age. See IRS table of age-related insurance costs, used nationwide, as printed below. If you choose the “two times salary” option for Basic Life coverage, the IRS insurance costs will rise proportionately with each salary increase you receive. This is another reason for evaluating your choices periodically.

Selecting the $10,000 or $50,000 option will avoid taxable income. However, you should make your choices carefully, as there may be reasons for choosing the higher level of Basic Life insurance. The University's program offers choices so that you can take all your needs into consideration when selecting this coverage. Please note: Because the cost of Optional Life coverage (administered by MetLife) is deducted from your pay on an after-tax basis, Optional Life coverage is not included in imputed income.

Choosing the "two times salary" level of Basic Life coverage can result in additional taxable income. In deciding on your coverage, you should compare your need for Basic Life insurance over $50,000 to the consequences of any increased tax liability the excess coverage might trigger. Again, it is advisable to review your options frequently – particularly at the age groups where significant increased insurance costs occur. The University reports the taxable value (from the IRS table of insurance costs) on your W-2 form at the end of each calendar year.

IRS Insurance Costs Table (First $50,000 Excluded)
Age Costs/$1000/Month
Under 25 $.05
25 to 29 .06
30 to 34 .08
35 to 39 .09
40 to 44 .10
45 to 49 .15
50 to 54 .23
55 to 59 .43
60 to 64 .66
65 to 69 1.27
70 & Above 2.06
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