Imputed Income is the value of non-cash benefits provided by an employer, such as life insurance or personal use of a company car, treated as taxable income to the employee.
- What is imputed income?
Answer: It is the taxable value of non-cash benefits like life insurance. - What are examples?
Answer: Examples include group-term life insurance over $50,000 and housing allowances. - How is it taxed?
Answer: It is added to the employee’s W-2 as taxable wages. - Who calculates it?
Answer: Employers or payroll calculate it based on IRS rules. - What are the benefits for employers?
Answer: It allows offering perks without direct cash outlay.
