life insurance payout

jameng-taxes · ‎February 9, 2020

DawnC · ‎March 23, 2022

Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them.

However, any interest you receive is taxable and you should report it as interest received. See Topic 403 for more information about interest.

If the policy was transferred to you for cash or other valuable consideration, the exclusion for the proceeds is limited to the sum of the consideration you paid, additional premiums you paid, and certain other amounts. There are some exceptions to this rule. Generally, you report the taxable amount based on the type of income document you receive, such as a Form 1099-INT or Form 1099-R.

For additional information, see Publication 525, Taxable and Nontaxable Income and Are the Life Insurance Proceeds I Received Taxable?

To enter your 1099-R in TurboTax, click this link. @PapaDub1

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AlanT222 · ‎February 9, 2020

Life insurance payouts are not taxable. You do not have to report life insurance proceeds on your income tax return.

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PapaDub1 · ‎March 23, 2022

I had a life insurance policy "mature", had to take a distribution and received a 1099-R with a taxable amount on it. How is it that you say life insurance payouts are not taxable?

DawnC · ‎March 23, 2022

Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them.

However, any interest you receive is taxable and you should report it as interest received. See Topic 403 for more information about interest.

If the policy was transferred to you for cash or other valuable consideration, the exclusion for the proceeds is limited to the sum of the consideration you paid, additional premiums you paid, and certain other amounts. There are some exceptions to this rule. Generally, you report the taxable amount based on the type of income document you receive, such as a Form 1099-INT or Form 1099-R.

For additional information, see Publication 525, Taxable and Nontaxable Income and Are the Life Insurance Proceeds I Received Taxable?

To enter your 1099-R in TurboTax, click this link. @PapaDub1

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