GROUP-TERM LIFE INSURANCE PURCHASED FOR EMPLOYEES.

SEC. 204. GROUP-TERM LIFE INSURANCE PURCHASED FOR EMPLOYEES. (a) Inclusion in Income.— (1) Part II of subchapter B of chapter 1 (relating to items specifically included in gross income) is amended by adding at the end thereof the following new section: “SEC. 79. GROUP-TERM LIFE INSURANCE PURCHASED FOR EMPLOYEES. “(a) General Rule.—There shall be included in the gross income of an employee for the taxable year an amount equal to the cost of group-term life insurance on his life provided for part or all of such year under a policy (or policies) carried directly or indirectly by his employer (or employers); but only to the extent that such cost exceeds the sum of— “(1) the cost of $50,000 of such insurance, and “(2) the amount (if any) paid by the employee toward the purchase of such insurance. “(b) Exceptions.—Subsection (a) shall not apply to— “(1) the cost of group-term life insurance on the life of an individual which is provided under a policy carried directly or indirectly by an employer after such individual has terminated his employment with such employer and either has reached the retirement age with respect to such employer or is disabled (within the meaning of paragraph (3) of section 213(g), determined without regard to paragraph (4) thereof), “(2) the cost of any portion of the group-term life insurance on the life of an employee provided during part or all of the taxable year of the employee under which— “(A) the employer is directly or indirectly the beneficiary, or “(B) a person described in section 170(c) is the sole beneficiary, for the entire period during such taxable year for which the employee receives such insurance, and “(3) the cost of any group-term life insurance which is provided under a contract to which section 72(m) (3) applies. “(c) Determination of Cost of Insurance.—For purposes of this section and section 6052, the cost of group-term insurance on the life of an employee provided during any period shall be determined on the basis of uniform premiums (computed on the basis of 5-year age brackets) prescribed by regulations by the Secretary or his delegate. In the case of an employee who has attained age 64, the cost prescribed shall not exceed the cost with respect to such individual if he were age 63.” (2) The table of sections for part II of subchapter B of chapter 1 is amended by adding at the end thereof the following: “Sec. 79. Group-term life insurance purchased for employees.” (3) Section 7701(a) (20) (defining employee) is amended by striking out “For the purpose of applying the provisions of sections 104” and inserting in lieu thereof “For the purpose of applying the provisions of section 79 with respect to group-term life insurance purchased for employees, for the purpose of applying the provisions of sections 104”. (b) Withholding.—Section 3401(a) (relating to definition of wages) is amended by striking out the period at the end of paragraph (13) and inserting in lieu thereof “; or”, and by adding at the end (hereof the following new paragraph: “(4) in the form of group-term life insurance on the life of an employee; or”. 78 Stat. 37 (c) Information Reporting.— (1) Requirement.—Subpart C of part III of subchapter A of chapter 61 (relating to information and returns) is amended by adding at the end thereof the following new section: “SEC. 6052. RETURNS REGARDING PAYMENT OF WAGES IN THE FORM OF GROUP-TERM LIFE INSURANCE. “(a) Requirement of Reporting.—Every employer who during any calendar year provides group-term life insurance on the life of an employee during part or all of such calendar year under a policy (or policies) carried directly or indirectly by such employer shall make a return according to the forms or regulations prescribed by the Secretary or his delegate, setting forth the cost of such insurance and the name and address of the employee on whose life such insurance is provided, but only to the extent, that the cost of such insurance is includible in the employee’s gross income under section 79(a). For purposes of this section, the extent to which the cost of group-term life insurance is includible in the employee’s gross income under section 79(a) shall be determined as if the employer were the only employer paying such employee remuneration in the form of such insurance. “(b) Statements To Be Furnished to Employees With Respect to Whom Information Is Furnished.—Every employer making a return under subsection (a) shall furnish to each employee whose name is set forth in such return a written statement showing the cost of the group-term life insurance shown on such return. The written statement required under the preceding sentence shall be furnished to the employee on or before January 31 of the year following the calendar year for which the return under subsection (a) was made.” (2) Penalties for failure to furnish statements to persons with respect to whom returns are filed.—Section 6678 (relating to failure to furnish certain statements) is amended— (A) by striking out “or 6049(c)” and inserting in lieu thereof “6049(c), or 6052(b)”; and (B) by striking out “or 6049(a)(1),” and inserting in lieu thereof “6049(a)(1), or 6052(a),”. (3) Clerical amendment.—The table of sections for subpart (‘of part III of subchapter A of chapter 61 is amended by adding at the end thereof the following: “Sec. 6052. Returns regarding payment of wages in the form of group-term life insurance.” (4) Cross reference.— For penalty for failure to file information returns required by section 6052(a) of the Internal Revenue Code of 1954 (added by paragraph (1) of this subsection), see section 6652(a)(3) of such Code (as amended by section 221(b)(2) of this Act). (d) Effective Dates.—The amendments made by subsections (a) and (c), and paragraph (3) of section 6652(a) of the Internal Revenue Code of 1954 (as amended by section 221(b)(2) of this Act), shall apply with respect to group-term life insurance provided after December 31, 1963, in taxable years ending after such date. The amendments made by subsection (b) shall apply with respect to remuneration paid after December 31, 1963, in the form of group-term life insurance provided after such date. In applying section 79(b) of the Internal Revenue Code of 1954 (as added by subsection (a)(1) of this section) to a taxable year beginning before May 1, 1964, if paragraph (2) (B) of such section applies with respect to an employee for the period beginning May 1, 1964, and ending with the close of his first taxable year ending after April 30, 1964, such paragraph (21(B) shall he treated as applying with respect to such 78 Stat. 38employee for the period beginning January 1, 1964, and ending April 30, 1964.