Ezel / IRS Rulings / 1350037
Chief Counsel Advice 1350037 Released December 13, 2013 Advice

CCA 1350037: dependent group-term life insurance exceeding $2,000 is not a de minimis fringe benefit

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This page covers one taxpayer's ruling from 2013, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2013
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice addresses employer-provided dependent group-term life insurance. The advice concludes that coverage with a face amount exceeding $2,000 is not a de minimis fringe benefit. In applying the threshold, the analysis considers the excess of the insurance cost over the employee's after-tax payment. The insurance cost is determined under Treas. Reg. § 1.79-3(d)(2), and the entire benefit is included in the employee's income when the de minimis limits are exceeded.

Ruling snapshot

  • Question: When is employer-provided dependent group-term life insurance a de minimis fringe benefit?
  • Outcome: Advice given
  • Key authorities: IRC § 132; Treas. Reg. §§ 1.79-3(d)(2), 1.132-6(d)(4); Notice 89-110

Full text (IRS public release)

ID: CCA_2013102511313696 Third Party Communication: None

UILC: 132.04-00 Date of Communication: Not Applicable

Number: 201350037
Release Date: 12/13/2013
From:
Sent: Friday, October 25, 2013 11:31:37 AM
To:
Cc:
Bcc:
Subject: RE: Life Insurance for Dependents

I agree with your analysis. Because the face amount of the employer-provided dependent group-term
life insurance exceeds $2,000, the insurance is NOT deemed to be a de minimis fringe benefit (see
Notice 89-110). In determining whether dependent group-term life insurance with a face value
exceeding $2,000 is de minimis or not, we only take into account the excess (if any) of the cost of the
insurance over the amount paid for the insurance by the employee on an after-tax basis. As you
conclude, the cost of the insurance is determined under section 1.79-3(d)(2) of the regulations. A cliff
provision does apply in that, if an employer provides a benefit that exceeds either the value or the
frequency limitations for de minimis fringe benefits, the entire benefit is included in the employee’s
income, not just the portion that exceeds the de minimis limits (see Reg. Section 1.132-6(d)(4)). Hope
this is helpful.

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