So I recently lost my spouse and joint filer. I am unemployed. Is there federal or state of Virginia tax liability for his life insurance policy.
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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.
Hello gndzeromyers,
I'm so happy you joined us today, and I am really sorry to hear about your loss.
For Federal, Life insurance proceeds are typically non taxable. Here is what the IRS Says:
Virginia states Under IRC § 101, life insurance benefit payments paid by reason of the death of the insured are exempt from federal taxation, and thus exempt from Virginia taxation.
Again, my sincerest condolences. Feel free to respond if you have any further questions.
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