Is Life Insurance Taxed In North Carolina?

  1. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    Life insurance in North Carolina is not charged income tax, in most situations. Life insurance is income tax free, but does incur estate taxes if the life insurance proceeds bump the estate to over the exempted limit. Then the amount of the estate over the exempted amount is charged estate tax. Interest on life insurance payments taken in installments, or the amount of the death benefit over the face amount, can also be taxed.
    Answered on August 16, 2013
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