IRS PLR: Survivor Benefits Related to Service of Deceased Plan Members Excludible From Gross Income (IRC §104)

A city plan’s payments of benefits to survivors of deceased members under relevant sections of the city’s code as a continuation of job-related disability payments or as a service-connected death benefit are excluded from the recipient’s gross income under tax code Section 104(a)(1) and Treasury Regulations Section 1.104-1(b), the IRS ruled. Any excess over the actuarial equivalent of the benefit payable under the City Code sections is includible and taxable under Section 72, as is any survivor benefit that is determined by reference to the member’s age, length of service, or prior employee contributions, the ...