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skj
Level 2

Michigan inheritance

I inherited proceeds from my father's insurance policy. Do I claim it as income on Michigan's state return?

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DaveF1006
Expert Alumni

Michigan inheritance

Life insurance proceeds are not taxable income either on the federal level or the state of Michigan. However, if a portion of your proceeds was interest earned on the principle, then the earnings accrued is table income. This is information should be disclosed on a statement received with the check if a statement was included.

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4 Replies
PattiF
Expert Alumni

Michigan inheritance

No, life insurance proceeds that you receive as a beneficiary due to the death of the insured person, are not taxable. If you receive any reported interest on the proceeds, then that is taxable.

skj
Level 2

Michigan inheritance

I know inheritance from life insurance is not reported at the Federal level but is it also not reported as income on my Michigan State return? Turbo Tax Michigan State section in the "Sources of Household Resources" asks "received inheritance or proceeds from a life insurance policy as beneficiary." 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DaveF1006
Expert Alumni

Michigan inheritance

Life insurance proceeds are not taxable income either on the federal level or the state of Michigan. However, if a portion of your proceeds was interest earned on the principle, then the earnings accrued is table income. This is information should be disclosed on a statement received with the check if a statement was included.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
skj
Level 2

Michigan inheritance

Many thanks for the clarification.  Don't understand why Turbo Tax Michigan State return asks the question.  

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