Question

Life Insurance Payouts to Estate

Forum|Forum|3 years ago
February 16, 2023
2 replies
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My dad's life insurance payouts went to his estate which is still in probate. I understand now that the life insurance proceeds are not taxable; but at the time of payout, I had 10% federal income tax withheld and 6% state tax withheld. How do I report the federal taxes withheld on Form 1041 so that I can recoup them? I think I report them on Schedule G, line 14. Please verify. I'll have to figure out state taxes later.

TurboTax Business Windows

R

RobertB4444

Line 14 is where you report them but do not check the box for a 1099.

@Estate2022

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A

Anonymous_

Employee

Note also:

Except for backup withholding (as explained below), withheld income tax can't be passed through to beneficiaries on either Schedule K-1 or Form 1041-T.

Backup withholding.

If the estate or trust received a 2022 Form 1099 showing federal income tax withheld (that is, backup withholding) on interest income, dividends, or other income, check the box and include the amount withheld on income retained by the estate or trust in the total for line 14.

Report in box 13, code B, of Schedule K-1 (Form 1041) any credit for backup withholding on income distributed to the beneficiary.