California Premium Tax for Guaranteed Income Annuity

[spudster]

A CA Premium tax was charged in 2021 for the purchase of a Guaranteed Income Annuity that will not begin to pay out until 2023.  Do I need to report the CA premium tax charged on my 2021 Income taxes?  If not, how do I report it once the monthly distributions begin in 2023?

[DaveF1006]

State premium taxes are sales taxes assessed on insurance premiums. Because annuities are insurance products, they are regulated by the insurance commissions in each state. 

If you itemize expenses on your federal return and if you deduct actual sales taxes, instead of using the IRS pre-determined amount, or deducting state income taxes in your itemized deductions, then you can include the tax paid both as an itemized expense on your federal return as well as in your California State return. To claim:

1. Go to Federal>Deductions and Credits
2. Estimates and other Taxes paid>sales tax