Imputed Income

If the total value of your basic life insurance exceeds $50,000, the amount exceeding $50,000 is considered “imputed income” (taxable income) by the Internal Revenue Service (IRS). For example, if the total value of your basic employee or retiree life insurance is $60,000, imputed income is calculated on $10,000 of your life insurance. The imputed income is added to your total annual compensation reported to the IRS, appears on your W-2 statement and is taxable at your regular income tax rate.

Domestic partner coverage (and coverage for your domestic partner’s dependents) is considered a taxable benefit. If you are an active employee, the value of your domestic partner’s and/or domestic partner’s dependents’ medical and dental coverage is subject to imputed income.

For more information about imputed income, refer to the applicable SPD.