Yes, if you paid taxes on Life insurance proceeds that aren't taxable, you need to amend your 2019 income tax return to claim taxes paid.
Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income.. However, any interest you receive is taxable and you should report it as interest income. Life insurance proceeds aren't taxable, therefore, no tax withheld but with one exception: If the policyholder elects not to have the benefit paid out immediately upon his death but instead held by the life insurance company for a given period of time, the beneficiary may have to pay taxes on the interest generated during that period. And when a death benefit is paid to an estate, the person or persons inheriting the estate may have to pay estate taxes on it.
