1099's for PS 58 Costs

[Guest bmij]

I would like to know how the issue of 1099's for PS 58 costs are being handled or by whom. Who generally handles it, insurance company or the tpa firm?

[ETA Consulting LLC]

Typically, it would be the TPA firm. It's a simple calculation, but there really isn't a statutory requirement that the economic benefit on the policy get's taxed each year. In the event it doesn't the death benefit payout (the net amount at risk portion) would not get the tax-free payout in the event the insured dies.

Given this flexibility, it should always be the TPA. They should also track the cumulative basis; I'd never trust an insurance carrier to do this.

Good Luck!

[Bird]

Agreed, usually the TPA firm does the 1099-R. But as an FYI, if the insurance company is National Life of Vermont, they do the 1099s.

[Guest bmij]

Thank you for your help.