🛡️📅 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.