Final answer:
An employee is exempt from income tax liability on the first $50,000 of employer-provided group term life insurance coverage. Beyond this amount, the coverage becomes taxable based on IRS guidelines.
Step-by-step explanation:
With regards to employer-paid group term life insurance, the employee is free from income tax liability for the first $50,000 of term life insurance protection. This means an employee receiving group term life insurance coverage from their employer won't have to pay income tax on the first $50,000 of coverage provided. Any amount above this value can be subject to income taxes, and the calculation for the taxable amount generally depends on IRS-provided premium rates, considering the employee's age.
Pension insurance, deposit insurance, and workman's compensation insurance are different forms of protection that, like employer-paid group term life insurance, provide specific benefits to workers under certain conditions, contributing to employee financial security and workplace stability.