Tax Consequences Of A Sale Of A Life Insurance Policy As A Viatical Settlement
What Are The Tax Consequences Of A Viatical Settlement On The State Level?
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Unlike federal tax law which is the same for residents of all states, state tax law differs from state to state. Each state determines the taxability of a viatical settlement with respect to its residents as shown in the chart below.
STATE |
Exempts Proceeds From Viatical Settlement From State Tax |
No State Income Tax |
Applies Federal Tax Standard |
Possibly Taxable |
ALABAMA (AL) |
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|
√ |
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ALASKA (AK) |
|
√ |
|
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ARIZONA (AZ) |
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|
|
√ |
ARKANSAS (AR) |
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|
|
√ |
CALIFORNIA (CA) |
√ |
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|
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COLORADO (C0) |
|
|
√ |
|
CONNECTICUT (CT) |
|
|
√ |
|
DELAWARE (DE) |
|
|
√ |
|
DISTRICT OF COLUMBIA (DC) |
|
|
|
√ |
FLORIDA (FL) |
|
√ |
|
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GEORGIA (GA) |
|
|
|
√ |
HAWAII (HI) |
|
|
|
√ |
IDAHO (ID) |
|
|
|
√ |
ILLINOIS (IL) |
|
|
√ |
|
INDIANA (IN) |
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|
|
√ |
IOWA (IA) |
|
|
|
√ |
KANSAS (KS) |
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|
|
√ |
KENTUCKY (KY) |
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|
|
√ |
LOUISIANA (LA) |
|
|
√ |
|
MAINE (ME) |
√ |
|
|
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MARYLAND (MD) |
|
|
√ |
|
MASSACHUSETTS (MA) |
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|
|
√ |
MICHIGAN (MI) |
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|
√ |
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MINNESOTA (MN) |
|
|
√ |
|
MISSISSIPPI (MS) |
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|
|
√ |
MISSOURI (MO) |
|
|
√ |
|
MONTANA (MT) |
|
|
√ |
|
NEBRASKA (NE) |
|
|
√ |
|
NEVADA (NV) |
|
√ |
|
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NEW HAMPSHIRE (NH) |
|
|
|
√ |
NEW JERSEY (NJ) |
|
|
|
√ |
NEW MEXICO (NM) |
|
|
√ |
|
NEW YORK (NY) |
√ |
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NORTH CAROLINA (NC) |
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|
|
√ |
NORTH DAKOTA (ND) |
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|
√ |
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OHIO (OH) |
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|
√ |
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OKLAHOMA (OK) |
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|
√ |
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OREGON (OR) |
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|
|
√ |
PENNSYLVANIA (PA) |
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|
|
√ |
PUERTO RICO (PR) |
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|
|
√ |
RHODE ISLAND (RI) |
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|
√ |
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SOUTH CAROLINA (SC) |
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|
|
√ |
SOUTH DAKOTA (SD) |
|
√ |
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TENNESSEE (TN) |
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|
√ |
TEXAS (TX) |
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√ |
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UTAH (UT) |
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|
√ |
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VERMONT (VT) |
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|
√ |
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VIRGINIA (VA) |
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|
√ |
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WASHINGTON (WA) |
|
√ |
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WEST VIRGINIA (WV) |
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|
|
√ |
WISCONSIN (WI) |
|
|
|
√ |
WYOMING (WY) |
√ |
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