If you are a beneficiary to a life insurance policy, doyou have to pay taxes on the money received?

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If you are a beneficiary to a life insurance policy, doyou have to pay taxes on the money received?

Asked on December 13, 2011 under Business Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Under Internal Revenue Service regulations insurance proceeds are tax free proceeds that do not need to be reported under state and federal tax returns as income. This has been the law of each state and the federal government for many years.

In essence, a person who is a beneficiary under a life insurance policy stands in much the same situation as a person who is a beneficiary under a Will or trust. Should you be the beneficiary, you should not receive a 1099 form. If you do, you should question the person who issued it to you concerning the life insurance policy proceeds.

 

 


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