🛡️📅 March 31, 2025 – IRS Electronic Filing Deadline for Insurance Companies
Insurance companies and life settlement providers must electronically file these forms with the IRS by March 31, 2025, reporting life insurance-related transactions and benefits.
The paper deadline was February 28, 2025.
These forms help the IRS monitor taxable events related to life insurance contracts, long-term care benefits, and policy sales.
🧾 Form 1099-LS – Reportable Life Insurance Sale
🔍 What is it?
Reports the sale or transfer of a life insurance policy for valuable consideration in a reportable policy sale (e.g., a life settlement).
🏢 Who files it?
Acquirers of life insurance contracts in a reportable policy sale (e.g., settlement providers or investors).
📥 What information does it include?
Identity of the seller
Sale amount
Policy information
Insured party
💡 Why it matters:
This form is used to determine the taxability of the sale proceeds for the seller. Proceeds above the seller’s basis may be taxable income.
🧾 Form 1099-LTC – Long-Term Care and Accelerated Death Benefits
🔍 What is it?
Reports benefits paid under:
Long-term care (LTC) insurance contracts, or
Accelerated death benefits paid from a life insurance policy due to terminal or chronic illness.
🏢 Who files it?
Insurance companies issuing LTC benefits or accelerated death benefit payments.
📥 What information does it include?
Amount of benefits paid
Whether payments were periodic or per diem
Insured and policy details
💡 Why it matters:
These benefits are generally tax-free, but must be reported to the IRS to confirm eligibility and track annual benefit limits.
🧾 Form 1099-SB – Seller’s Investment in a Life Insurance Contract
🔍 What is it?
Filed when the issuer of a life insurance policy is notified that the policy has been sold in a reportable policy sale.
🏢 Who files it?
The insurance company that issued the policy.
📥 What information does it include?
The seller’s investment in the contract (basis)
Policy details
Sale date
💡 Why it matters:
This form provides the buyer and IRS with the seller’s cost basis, which is used to determine gain or loss on future taxable events related to the policy.