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Old 08-14-2009, 10:35 AM
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life insurance payout in california

If I died and I had a life insurance policy through my company, would that benefit be taxable to my beneficiary through either California Franchise Tax Board or the IRS?



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Old 08-15-2009, 12:08 AM
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Do you mean the policy is owned and funded by your company?

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Old 05-19-2011, 04:47 AM
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In every life insurance policy you have to nominate the beneficiary for the completion of contract.So, your beneficiary will surely receive the fixed amount of insurance for your life insurance.
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Last edited by Grantes : 05-21-2011 at 02:40 AM.


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Old 11-12-2013, 01:50 AM
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Depends on the situation, not necessary



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Old 11-12-2013, 02:04 PM
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Quote:
Originally Posted by jenniferwiget View Post
Depends on the situation, not necessary
Iassume it ,the policy is owned and funded by your employer, then death benefits on an individual's life insurance policy are not considered taxable income; The benefit of employer-paid life life insurance is that the death benefit is paid out to your beneficiaries on a tax-free basis. This makes the insurance policy the same as any other life insurance policy. The disadvantage of employer-paid life insurance is that the premiums paid for the policy may be taxable to you as income. While your beneficiaries receive tax-free death benefits, you must pay income tax on the money your employer uses to pay the premiums on the policy. The only exception to this is in the case of group life insurance where the employer pays premiums sufficient to pay for a death benefit up to $50k. Anything over this amount is taxable to you as income.generally, you don't have to pay tax on a life insurance death benefit. If a life insurance death benefit is paid to your beneficiary in a lump sum or other than at regular intervals, include it in his gross taxable income on his tax return only to the extent it is more than the amount of life insurance death benefit payable tohim at the time of the insured person’s death, yur death. In other words, if the life insurance death benefit is $50k and your bene receives $50.1k the $100 is taxable interest and he should include it on his tax return. If the life insurance death benefit paid to him is not greater than the amount of the life insurance death benefit payable at death then it is not taxable and he should not include it on his tax return. In other words if the life insurance death benefit is $50k and he receives $50k there is no taxable interest to include on his tax return.If he receives a life insurance death benefit in installments he can exclude a part of each life insurance death benefit installment from his taxable income on his tax return. In this case,he needs to divide the life insurance death benefit of the policy by the number of years payments are to be received. That's the amount that is tax free each tax year.



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