Dividends earned on a life insurance policy are considered a return of premium for tax purposes. Dividends become taxable when the dividend earned is greater than the total net premium paid. If the dividends earned on your policy in 2024 exceeded the policy’s total net premiums paid they are reported on Form 1099-R. Box 7 of your Form 1099-R, which should have a distribution code of 7 or 1.
What other boxes on your Form 1099-R are filled out (or checked)?
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
