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February 19, 2009

Death benefit exclusion

Your Guide



Death benefits that can be excluded from income.

The beneficiary of a deceased employee (or former employee), who died before August 21, 1996, may qualify for a death benefit exclusion of up to $5,000.

The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion.

Referring Cite

IRC § 101(b)

Additional Helpful Information

  • The death benefit exclusion was repealed under the Small Business Job Protection Act of  1996, Pub. L. 104-188 ( SBJPA) , for participants  who died after August 20, 1996
  • This exclusion does not apply to IRAs

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