TREATMENT OF GROUP-TERM LIFE INSURANCE UNDER RAILROAD RETIREMENT TAXES.

SEC. 10205. TREATMENT OF GROUP-TERM LIFE INSURANCE UNDER RAILROAD RETIREMENT TAXES. (a) In General.—The second sentence of section 3231(e)(1) of the Internal Revenue Code of 1986 (defining compensation) is amended by striking ”, (ii) tips” and inserting “or death, except that this clause does not apply to a payment for group-term life insurance to the extent that such payment is includible in the gross income of the employee, (ii) tips”. (b) Effective Date.— (1) In general.— Except as provided in paragraph (2), the amendment made by subsection (a) shall apply to— 103 STAT. 2475 (A) group-term life insurance coverage in effect after December 31, 1989, and (B) remuneration paid before January 1, 1990, which the employer treated as compensation when paid. (2) Exception.—The amendment made by subsection (a) shall not apply with respect to payments by the employer (or a successor of such employer) for group-term life insurance for such employer’s former employees who separated from employment with the employer on or before December 31, 1989, to the extent that such payments are not for coverage for any such employee for any period for which such employee is employed by such employer (or a successor of such employer) after the date of such separation. (3) Benefit determinations to take into account remuneration on which tax paid.—The term “compensation” as defined in section 1(h) of the Railroad Retirement Act of 1974 includes any remuneration which is included in the term “compensation” as defined in section 3231(e)(1) of the Internal Revenue Code of 1986 by reason of the amendment made by subsection (a).