Frequently Asked Questions on 1099's

Mutual Trust Life Solutions produces 1099-INT and 1099-R forms that combine the taxable earnings for multiple policy numbers with the same payee social security number or tax ID number. If you are a policyowner with multiple policies, you receive only one 1099-INT and/or one 1099-R form, if applicable. The forms include all the policy numbers and detail the totals that will be reported to the IRS as having been earned under that social security number or tax ID number during the tax year.

How can I access my 1099 Form(s)?

Form 1099-R

What is a Form 1099-R?
Form 1099-R is generally used to report distributions of $10 or more from pensions, annuities, profit sharing and retirement plans, IRA's, and insurance contracts. Copies of the Form 1099-R are provided to the taxpayer of the designated distribution reflected on the Form, the Internal Revenue Service and the appropriate state, city or local tax department. If you have questions about other types of payments reported on Form 1099-R, please consult your personal tax advisor.

I didn't receive a Form 1099-R for the prior taxable year. Should I have received this Form?
Form 1099-R reports designated distributions. Therefore, if your contract did not have a designated distribution in the prior taxable year, you would not have received a Form 1099-R. If you are unsure of the liquidation or withdrawal status of your contract for the prior taxable year, please call our Customer Service Representative whose telephone number is listed on Form 1099-R.

What is the significance of the distribution code information contained in Box 7 of the Form 1099-R?
The IRS requires us to identify the type of distribution received by the designated distribution code in Box 7. For example, certain codes will indicate whether a premature distribution penalty is applicable, whether the distribution was part of a Section 1035 exchange, and whether the distribution was a return of excess contributions taxable in a current or prior year. For further code descriptions, please refer to the Form 1099-R instructions for Box 7. If an additional explanation is required, please consult your personal tax advisor or contact our Customer Service Division.

Why did I receive a Form 1099-R?
Here are a few scenarios which may cause a Form 1099-R to be generated:

• Any surrender of a policy that has a gain. (Note, that a later reinstatement of the surrendered policy will NOT offset the taxable gain.)
  
  
• Lapse of a loaned policy that has a gain.
  
  
• A partial surrender under a policy that has a gain, including surrenders attributable to a reduction in face amount.
  
  
• Matured policies that have incurred a taxable gain.
  
  
• Any distribution, including loans, loan interest added, or dividends surrendered in cash from a Modified Endowment Contract (MEC) that has a gain, or when a collateral assignment takes effect on a MEC that has a gain.
  
  
• A 1035 exchange from one insurer to another. Although a 1035 is generally not taxed, the IRS requires the original insurer to report the amounts transferred to the new insurance company.
  
  
• The death benefit paid to the beneficiary of an annuity contract. If the annuity was a qualified annuity such as an IRA, the total death benefit is taxable to the beneficiary. If the annuity was a non-qualified annuity, the gain (death benefit minus contributions received) is taxable to the beneficiary.

Why did I still receive multiple Forms 1099-R?
We can only combine multiple policies or multiple distributions from one policy together on this form if the types of distributions match. In order to be considered a match, the information in Box 2b and Box 7 must be the same.

Form 1099-INT

• Interest earned on dividend accumulations.
  
  
• Interest earned on premiums paid in advance or deposit fund.
  
  
• Interest earned on insurance death claim proceeds from the date of death to the date of settlement.
  
  
• Interest earned on annuity death claim proceeds from the date of death to the date of settlement.
  
  
• Interest earned on maturities from the maturity date to the date of settlement.
  
  
• Interest earned on refund of premium to avoid a Modified Endowment Contract (MEC).

What is the difference between a Form 1099-INT and a Form 1099-R?
Both forms report income generated by a policy, but they each report a different type of income. The Form 1099-INT is used to report interest credited on certain policy proceeds. The Form 1099-R is used to report designated distributions of a policy's internal earnings (gain) that were previously untaxed.

Do I owe State income taxes on my designated distribution?
State income tax regulations vary, and each situation is different. Therefore, you should consult your personal tax advisor for your specific state information.

There is a discrepancy between my records and the information contained on the Form 1099-R and/or Form 1099-INT. Can you help?
Yes. If you need further assistance, please call our customer service department at
1-800-323-7320, and reference the 4-digit code that appears at the beginning of the account number box (lower left-hand corner).

Find An Insurance Representative

Mutual Trust insurance representatives can help you achieve your short- and long-term financial goals. Don't wait, consult one today.

Find a Representative