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Get your taxes done using TurboTax
This is not an IRS publication but http://www.ask4benefits.com/cancer-insurance-policies-tax-deductible/
If the policy premiums were paid without any tax savings, then the proceeds are entirely tax free. However if the premiums were paid pretax or deducted on form 1040, then the proceeds may be taxable. Your insurance carrier may issue a form 1099 for any taxable proceeds paid during the previous tax year.
Taxation by Proceed CategoryThe proceeds may be taxable depending upon the type of policy feature triggering the claims payment.
- Lump sum indemnity proceeds may be considered taxable income. Proceeds derived from an initial diagnosis benefit, along with payments made based upon the number of days confined to a hospital due to cancer would be considered lump sum indemnity proceeds.
Disclaimer: Not a tax professional. Information gathered from internet links. Anything dated in June 2019 was posted in prior years and is before the 2019 limits and changes.
May 31, 2019
5:38 PM