A Section 162 plan is based on an Internal Revenue Code section that: permits an
ID: 470171 • Letter: A
Question
A Section 162 plan is based on an Internal Revenue Code section that:
permits an employer to deduct amounts paid for premiums on life insurance covering employees provided that the amounts of insurance and participation are offered on a nondiscriminatory basis
permits an employer to deduct amounts paid for premiums on life insurance covering selected employees provided that the amount is charged to the covered employee as a bonus (compensation)
permits a key employee to exclude from income up to a certain limited amount paid by his employer as a premium for insurance on his life
describes what are wages for purposes of the withholding tax
Explanation / Answer
Permits an employer to deduct amounts paid for premiums on life insurance covering selected employees provided that the amount is charged to the covered employee as a bonus (compensation)
Executive bonus plan are included in this section of Internal revenue code which is to provide certain benefits to executives
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