Where to Report Group Term Life Insurance on Form 1040

Where Group Term Life Insurance Appears on Your 1040

Group term life insurance is a common employee benefit. The premiums are paid by the employer, and the death benefit is paid to beneficiaries. For most workers, the premiums themselves are not reported on the 1040, but any taxable portion of the benefit does appear on specific lines. The key locations are:

• Line 1 (Wages, salaries, tips): If the employer pays the premium and it is a "non‑qualified" plan, the amount may be reported as taxable wages.
• Line 24a (Other income): Taxable insurance proceeds that are not excluded under § 102(a) are reported here.
• Schedule 1, Line 5 (Other adjustments): Certain insurance premiums may be deducted if they qualify as medical expenses.

When Premiums Become Taxable Income

Under Internal Revenue Code § 102(a), premiums paid by an employer for group term life insurance are not taxable up to an insurance coverage of $50,000. If coverage exceeds $50,000, the excess premium amount is treated as taxable wages and reported on the employee's W‑2, Box 1, and then carried over to the 1040. This amount is also subject to withholding and Social Security/Medicare taxes.

Reporting Death Benefits on the 1040

The death benefit paid to a beneficiary is generally not taxable to the beneficiary, so it is not reported on the 1040. However, if the beneficiary is a corporation or a partnership, the benefit may be taxable and must be reported on the appropriate corporate or partnership return, not the individual 1040.

Tax‑Free vs. Taxable Premiums: A Quick Reference Table

Key Takeaway for Tax Filers

Always check the W‑2 for any "other income" or "taxable fringe benefit" amounts related to life insurance. Those amounts must be transferred to the 1040. If you receive a statement indicating a taxable portion, it should be reported on Line 1 or Schedule 1. Failure to do so can trigger penalties and interest.