• Mezrah Consulting

Death Benefits Excluded From Tax Expenditure List

Updated: Jan 27

February 2, 2017

Recently, the Joint Committee on Taxation (JCT) released the annual update for its tax expenditure list, which included the exclusion for death benefits for the first time. The JCT defines a tax expenditure as, “revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.” This move was foreshadowed by last year’s JCT tax expenditure report, which indicated that the committee was considering adding death benefits to the list. The JCT estimated the cost of the exclusion to be $128.3 billion over five years.

Despite the updated JCT tax expenditure list, it is unlikely that this latest report will impact the current development of tax reform legislation in Congress. Currently, our tax system does not tax income proceeds from any form of insurance—whether from life insurance, disability insurance, health insurance, homeowner’s insurance, or auto insurance—and Mezrah Consulting will continue to assist organizations educating the JCT about the current and appropriate tax treatment of death benefits. In December 2015, the JCT removed inside build-up from the tax expenditure list, recognizing its appropriate tax treatment. If you have any questions regarding income tax proceeds from death benefits, please call Mezrah Consulting at (813) 367-1111 or email us at MezrahClientServices@mezrahconsulting.com.

Source: AALU

Recent Posts

See All

5690 West Cypress Street, Suite A,
Tampa, Florida 33607
Phone: +1.813.367.1111 • Fax: +1.813.433.2488


  • Facebook
  • Twitter
  • LinkedIn
  • YouTube

© 2021 Mezrah Consulting. All rights reserved.

Mezrah Consulting and/or its agents are licensed to sell traditional life insurance in: AL, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IL, LA, MA, MD, NJ, NY, VA, WV. Insurance services are limited to residents of the above listed states. Residents of other states should consult with a local agent for insurance services.

Securities offered through Lion Street Financial, LLC (512.776.8400), member FINRA, SIPC. Investment advisory products and services offered through Lion Street Advisors, LLC, an investment advisor registered with the SEC. Lion Street Financial, LLC and Lion Street Advisors, LLC are affiliated companies and do not provide tax or legal advice. Variable life and annuity products, as well as other securities products, may be sold in the following states: CA, MD. Residents of other states should consult with a local registered representative for securities products.

The contents of this site are for informational purposes only and are not to be construed as an offer to sell or a solicitation to buy any securities. Such offers can only be made where lawful under applicable law. The contents of this site have been compiled from sources that we believe to be reliable, but are not guaranteed. Mezrah Consulting does not warrant, guarantee or make any representation, or assume any liability with regard to financial results based on the use of the information in the site.

The principal place of business and the state of domicile for Mezrah Consulting is: 5690 West Cypress Street, Suite A, Tampa, FL 33607.

Mezrah Consulting is Independently Owned and Operated. Check the background of this firm and/or investment professional on FINRA's Brokercheck.