1099 from Insurance Company.....is it taxable income?

[r_edwards60]

Hi!

Last January, our adult daughter had major water damage done to her own home - so bad, she had to move back in with us for 6 months. Her homeowners insurance company covered all of the repairs, etc. They also paid us $1500/month to compensate us for her having to live with us over that 6 month period of time. I recently received a 1099 from the insurance company for the $9000 total that they paid me over that 6 month period in 2023.

Is that considered taxable income? 

If yes, shouldn't I also be able to claim expenses against that income, for the additional utilities, food, and other expenses we incurred to offset some of that income? If yes, where and how on my TurboTax tax return do I record these expenses ?

Please provide guidance on this...thank you

[DawnC · Accepted solution]

It is not taxable.  You should keep it with your tax records in case of an inquiry.  It was part of her insurance claim, so it is no different if they paid her the $9k, and she paid you each month.  The 9K would not be taxable to her either as there is no income, just reimbursement based on her claim.

Because the purpose of insurance is to reimburse and ''make you whole'', you should generally only receive enough payment to bring you back to the state you were in before an incident occurred.

[r_edwards60]

thank you very much!

[Shue25]

Hello! What about if it was a 1099 INT from the insurance company for a claim? We recently received one for a claim that was paid out last year. Would this need to be claimed as income or interest on my taxes?
Thank you for your input!!

[LindaS5247]

You would enter your 1099-INT from your insurance company the same way you would enter a Form 1099-INT from your bank. It is taxable income.

Click here for "Where to enter your form 1099-INT in TurboTax". ‌It details the steps for entering your Form 1099-INT in TurboTax Desktop and TurboTax online.

 Click here for Turbo Tax information regarding Forms 1099-INT.