In which instance would excess Group Term Life Insurance be excluded from W-2 compensation?

The correct choice reflects IRS regulations regarding Group Term Life Insurance. Specifically, under the Internal Revenue Code, the cost of Group Term Life Insurance coverage provided to an employee is excluded from the employee's taxable income if the coverage does not exceed $50,000. This exclusion serves to allow employers to provide a basic level of life insurance coverage to employees without adding unnecessary tax burdens.

When the coverage exceeds the $50,000 threshold, the IRS requires that the excess value be included in the employee's W-2 compensation, which can lead to tax implications for the employee. By contrast, all other options suggest limits lower than this threshold or situations that do not fall under the specific exclusions outlined by tax law, which do not apply at the same value threshold for exclusion from taxable income.

Thus, understanding this threshold is essential for both employers and employees in managing benefits and taxable income accurately.