1099-R Question

CSpeechly — Mon, 23 Feb 2026 12:31:40 GMT

I need HELP. Each year I receive an "annual Notice of Reportable Income" from a life insurance policy I have that forms part of my companies Profit Sharing Plan. It states that " We are providing you with reportable income amounts for each [participant under this retirement plan. As plan administrator, the internal revenue service requires that you report these amounts to each participant and the IRS using Form 1099-R.

For a self employed owner employee, the reportable income amount shown ($3,674) is not tax deductible. To determine the deductible contribution for an owner-employee, subtract the reportable income amount from the annual contribution.

Thats all I get from the life insurance company.

So my question is this: I pay $3,904 annually for the life insurance policy that is part of my profit sharing plan. I receive NO physical distribution of money and yet each year I receive the same notice as stated above. Is the $3,674 taxable, despite me never receiving any actual income from this notice?

Re: 1099-R Question

DavidD66 — Wed, 15 Feb 2023 00:53:36 GMT

Yes, it is taxable. There is limit to the amount a company can pay for life insurance for an employee without it being a taxable benefit. You may not be seeing any money now, but there should be a cash value life insurance policy in your Profit Sharing account that is increasing in value. You should contact your plan administrator for details.

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1099-R Question

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