Understanding Your Tax Forms
If you receive a 1099 from us, you may have questions about why you received this form or what it means. The following information explains Forms 1099-R and 1099-INT for life insurance and annuity policy owners and answers the most frequently asked questions about these forms.
If you have any additional questions, please consult your Tax Advisor. You may also contact Life and Annuity Operations, however please be advised that our representatives are not licensed to give advice on tax reporting.
If you own a life insurance policy, the 1099-R could be the result of a taxable event, such as a full surrender, partial withdrawal, loan or dividend transaction.
If you own an annuity, the 1099-R could be the result of a full surrender, a partial withdrawal or the transfer of the contract to a new owner. If an annuity is owned by a "non-natural person," such as a trust, then any gain in the contract is taxable. If you are receiving payments from your annuity, the taxable portion of those distributions will be recorded on the 1099-R.
This is the total amount of the policy/contract distribution before deducting any loans or loan interest. This number may differ from the policy's net surrender value.
This is the total earnings, or profit, on an insurance policy or annuity contract that has been distributed to the policy owner for that year. The calculation is made as follows:
Gross distribution (Box1) – Employee contributions or insurance premiums (Box 5) = Taxable Amount (Box 2a)
Employee contributions or insurance premiums
For traditional products, this is the difference between the amount of premiums paid into the policy less the value of the dividends credited. A negative amount indicates the dividends credited exceeded the premiums paid. For variable products, this is the total amount paid into the policy/contract. Note that any rider premium(s) would be excluded.
Each code identifies the type of distribution the policy/contract owner received. Phoenix sends a separate Form 1099-R for each type of distribution taken throughout the year.
The interest earnings may have resulted from dividends left on deposit with Phoenix, from values in a Premium Deposit Fund or from interest paid on a claim or policy/contract surrender.
Interest income not included in Box 3
This is the total policy/contract interest paid during the calendar year.
Early withdrawal penalty
This shows the interest or principal forfeited because of early withdrawal.
Federal income tax withheld
Tax withholding is an amount of money withheld from distributions and paid to the government towards the policy/contract owner's current tax year liabilities. The owner may request withholding on distributions; withholding may also be mandated based on the status of a current policy/contract.
Information in this box refers to backup withholding. If you do not provide a taxpayer identification number (TIN) or have provided an incorrect TIN, a payer must backup withhold at a rate of 28%. To provide or correct a TIN, please complete an IRS Form W9.