Split-Dollar Life Insurance

Report a split-dollar life insurance policy in Schedule A, and report your participation in the policy in Schedule C, Part II. Report a split-dollar life insurance policy for your spouse in Schedule A only. 

Split Dollar Life: Examples

For You

Schedule A

Report a split-dollar life insurance policy if the value of the policy was more than $1,000 at the end of the reporting period, or if the policy produced more than $200 in income during the reporting period.

Block A: Provide the name of the insurance company issuing the policy; write “split-dollar” to describe the payment method; note the type of policy (e.g., whole, universal, or variable); and provide the name of the employer through which you hold the policy. In addition, for a variable split dollar policy, you need to provide the names of each underlying asset within the policy that individually was worth more than $1,000 at the end of the reporting period or that individually produced more than $200 in income during the reporting period.

Block B: For whole or universal split-dollar policies, report the value of the policy by marking the appropriate column. For variable split-dollar policies, report the value of each underlying asset.

Block C: For whole or universal split-dollar policies, report the total amount of income produced during the reporting period by marking the appropriate “Amount” column. If the amount of income is more than $200, you also need to report the type of income by marking the applicable “Type” column. Report income even if the income is eligible for tax-deferred treatment. For variable split-dollar policies, report the income produced by each of the underlying assets.

Schedule C, Part II

You also need to report your continued coverage by a split-dollar life insurance policy in Schedule C, Part II.

Terms: Report that you will continue to be covered by a split-dollar life insurance policy and indicate whether the employer will continue to make contributions to the policy. You do not need to specify how the premiums will be repaid, but providing this information is helpful.

Parties: Provide the name of the employer as well as the city and state in which the employer is located.

Date: Provide the month and year in which you began participating in the policy.

For Your Spouse

Schedule A

Report your spouse’s split-dollar policy in the same manner as described in the section titled “For You” above.

Schedule C, Part II

Do not report continued coverage of your spouse in Schedule C, Part II. 

 

This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.