topic As a beneficiary, is a death benefit check considered income? in Get your taxes done using TurboTax

As a beneficiary, is a death benefit check considered income?

mikeandevehanie — Thu, 06 Jun 2019 09:56:05 GMT

if so, how is it entered?

It depends on what the death benefit check is for. If the...

MargaretL — Thu, 06 Jun 2019 09:56:06 GMT

It depends on what the death benefit check is for.

If the check represents proceeds from life insurance because of the death of the injured person - the check is not taxable nor reported on your tax return. Note that if the insurance proceeds were delayed, there may be taxable interest on the non-taxable insurance proceeds... you would then receive 1099-INT if you have taxable interest in the proceeds which should be reported. Form 1099-INT is entered as follows:

Federal Taxes
Wages and Income
Interest and Dividends, select Interest on 1099-INT

If the check is received as part of a financial arrangement before the insured's death, it is taxable. You would receive form 1099-R, data entry is below.

If the check is a death benefit for any retirement plan from the deceased, then it may be taxable, fully or partially. You would report form 1099-R (which you should receive) for any death benefit from deceased retirement, such as 401K, IRA, etc. Form 1099-R is entered as follows:

Federal Taxes
Wages and Income
Scroll down to Retirement Plans and Social Security
Select IRA, 401(k), Pension Plans (1099-R)

Re: It depends on what the death benefit check is for. If the...

ddsader90 — Mon, 27 Apr 2020 18:23:48 GMT

We received a 1099-R for the minimum distribution we took, but not for the interest earned on the account. Do I need to total up the interest myself? If so, where would I enter it?

Re: As a beneficiary, is a death benefit check considered income?

VictoriaD75 — Wed, 29 Apr 2020 16:37:44 GMT

The interest may be reported separately on a 1099-INT. If not, you must still report the interest income.

From the Federal menu, choose Wages & Income
Expand the menu for Interest and Dividends
Click Start/Revisit next to Interest on 1099-INT
Answer Yes to Did you receive any interest income? or click on Add a 1099-INT
Do not import the information. On the bottom, right-hand, click on I'll type it in myself
Enter the payer information and interest income in Box 1

Re: As a beneficiary, is a death benefit check considered income?

ckenealyl — Fri, 09 Apr 2021 15:55:16 GMT

the other 4 childern did not receive a 1099 for the interest income in there checks do they still need to file and how do they file when don't know what the interest was that was added to there checks

Re: As a beneficiary, is a death benefit check considered income?

Irene2805 — Fri, 09 Apr 2021 16:06:15 GMT

If the death benefit if from Social Security, it is not taxable. If that is the only income a child/dependent has, then the child/dependent does not have to file or report it either.

If the child/dependent has enough other income to be required to file, then the child reports the SS on their own return. Please see this TurboTax Help article: Do I need to file my own taxes if I'm a dependent?

@ckenealyl