I’m the beneficiary of an insurance payout on the death of a relative — Is a life insurance payout taxable?
Regarding your question: Is life insurance payout taxable income, no, the IRS does not consider life insurance payouts taxable income.
However, life insurance payout taxable interest issues might arise if you earn interest on the payouts after the relative dies. If so, you’ll need to report this as taxable interest on your return.
Related Resources
If you received an insurance check for an auto-accident claim, do you report this as taxable income? Learn more from the tax experts at H&R Block.
Learn more about tax exempt dividends and get tax answers at H&R Block.
If your income is too high, you can’t contribute to a Roth IRA directly. Learn from H&R Block’s experts how you can still invest by creating a back door Roth IRA.
Need extra cash? H&R Block is here to help with a list of some of the best temporary jobs for making money on the side.
