Is business life insurance tax-deductible in Nevada?

The tax treatment of business life insurance depends on who owns the policy, who is covered, and what the policy is designed to accomplish. In general, premiums for key person insurance where the business is the beneficiary are not tax-deductible—but the death benefit is typically received income-tax-free.

Premiums for group term life insurance provided to employees may be deductible as a business expense when coverage does not exceed $50,000 per employee under IRS guidelines. Executive bonus plans (Section 162 plans) allow a business to deduct the bonus paid to an executive to fund an individual life insurance policy, even though the executive owns the policy personally.

Nevada has no state corporate income tax on businesses other than the Commerce Tax (for revenues above $4 million), so federal tax treatment dominates the planning conversation. The interplay between deductibility, death benefit taxation, and alternative minimum tax rules is nuanced, particularly for S-corporations and partnerships.

Because tax rules change and individual circumstances vary, agents in our network work alongside your CPA and business attorney to help you structure coverage that fits your tax strategy. This content is general in nature; consult a qualified tax professional for advice specific to your situation.