Form 8925 Report of Employer-Owned Life Insurance Contracts

8925

Form
(Rev. January 2010)

Report of Employer-Owned Life Insurance Contracts

Department of the Treasury
Internal Revenue Service (99)

© Attach

OMB No. 1545-2089
Attachment
Sequence No.

to the policyholder’s tax return—See instructions.

160

Name(s) shown on return

Identifying number

Name of policyholder, if different from above

Identifying number, if different from above

Type of business

1
2

Enter the number of employees the policyholder had at the end of the tax year . . . . .
Enter the number of employees included on line 1 who were insured at the end of the tax
year under the policyholder’s employer-owned life insurance contract(s) issued after August
17, 2006. See Section 1035 exchanges on page 2 for an exception
. . . . . . . .

3

Enter the total amount of employer-owned life insurance in force at the end of the tax year
for employees who were insured under the contract(s) specified on line 2 . . . . . . .

1

2
3

4a

Does the policyholder have a valid consent (see instructions) for each
employee included on line 2? . . . . . . . . . . . . . . .
Yes
No
b If “No,” enter the number of employees included on line 2 for whom the policyholder does
not have a valid consent . . . . . . . . . . . . . . . . . . . . . . .

General Instructions
Section references are to the Internal
Revenue Code unless otherwise noted.

Purpose of Form
Use Form 8925 to report the number of
employees covered by employer-owned
life insurance contracts issued after
August 17, 2006, and the total amount of
employer-owned life insurance in force
on those employees at the end of the tax
year. Policyholders must also indicate
whether a valid consent has been
received from each covered employee,
and the number of covered employees
for which a valid consent has not been
received.
See sections 101(j) and 6039I, and
Notice 2009-48, 2009-24 I.R.B. 1085, for
more information.

Definitions
Employer-owned life insurance
contract. For purposes of Form 8925,
an insurance contract is an employerowned life insurance contract if it is
owned by a policyholder as defined
below, and covers the life of the
policyholder’s employee(s) on the date
the life insurance contract is issued. If
you have master contracts, see section
101(j)(3) for additional information.
Policyholder. For purposes of Form
8925 and these instructions, a
policyholder is an "applicable
policyholder" as defined in section
101(j)(3)(B). Generally, a policyholder is
the person who owns the employerowned life insurance contract, and who
is (a) engaged in a trade or business

that employs the person insured under
the employer-owned life insurance
contract and (b) the direct or indirect
beneficiary of the employer-owned life
insurance contract.
Related person. A related person is
considered a policyholder if that person
is (a) related to the policyholder (defined
earlier) under sections 267(b) or 707(b)
(1), or (b) engaged in a trade or business
under common control with the
policyholder. See sections 52(a) and (b).
Employee. Employee includes an
officer, director, or highly compensated
employee under section 414(q).
Insured. An individual must be a U.S.
citizen or resident to be considered
insured under an employer-owned life
insurance contract. Both individuals
covered by a contract covering the joint
lives of two individuals are considered
insured.
Notice and consent requirements. To
qualify as an employer-owned life
insurance contract, the policyholder
must meet the notice and consent
requirements listed below before the
issuance of the contract.
1. Provide written notification to the
employee stating the policyholder
intends to insure the employee’s life and
the maximum face amount for which the
employee could be insured at the time
the contract was issued.

For Paperwork Reduction Act Notice, see page 2.

The written notification must include
a disclosure of the face amount of life
insurance, either in dollars or as a
multiple of salary, that the policyholder

Cat. No. 37737A

4b

reasonably expects to purchase with
regard to the employee during the
course of the employee's tenure.
Additional notice and consent are
required if the aggregate face amount of
the employer-owned life insurance
contracts with regard to an employee
exceeds the amount of which the
employee was given notice and to which
the employee consented. See Q&A-9
and Q&A-12 in Notice 2009-48.
2. Provide written notification to the
employee that the policyholder will be a
beneficiary of any proceeds payable
upon the death of the employee.
3. Receive written consent from the
employee. See Valid consent under the
instructions for line 4a.
Electronic notification and consent.
The written notification and consent
requirement can be met electronically
only if the system for electronic
notification and consent meets
requirements 1 through 3, above. See
Q&A-11 in Notice 2009-48 for more
information.
Issue date of contract. Generally, the
issue date of a life insurance contract is
the date on the policy assigned by the
insurance company on or after the date
of application. For purposes of meeting
the notice and consent requirements, the
issue date of the employer-owned life
insurance contract is the later of (1) the
date of application of coverage, (2) the
effective date of coverage, or (3) the
formal issuance of the contract. See
Q&A-4 in Notice 2009-48 for more
information.

Form

8925

(Rev. 1-2010)

Form 8925 (Rev. 1-2010)

Page

Who Must File

Specific Instructions

Generally, every policyholder owning
one or more employer-owned life
insurance contracts issued after August
17, 2006, must file Form 8925 for each
tax year the contract(s) is owned.

Name of Policyholder

Section 1035 exchanges.
Policyholders are not required to
complete Form 8925 for a life insurance
contract issued after August 17, 2006, as
part of a section 1035 exchange for a
contract issued before August 18, 2006.
See Q&A-15 in Notice 2009-48 for more
information.
However, any material increase in the
death benefit or other material change
to the contract will cause it to be treated
as a new contract and the policyholder is
required to file Form 8925. See Q&A-14
in Notice 2009-48 for more information.

The identifying number of an individual
is a social security number. For all other
taxpayers, it is an employer identification
number.

For master contracts under section
264(f)(4)(E), the addition of covered lives
is treated as a new contract only for the
additional covered lives.
See sections 1035 and 264 (f)(4)(E) and
Notice 2009-48 for more information.

How To File
Attach Form 8925 to the policyholder’s
income tax return for each tax year,
during which the policyholder has
employer-owned life insurance
contract(s) in force.

Recordkeeping
You must keep adequate records to
support the information reported on
Form 8925.

Enter the name of the policyholder
(defined earlier).

Identifying Number

Type of Business
Enter the policyholder’s trade or
business activity.

Line 4a
Valid consent. Before the issuance of
the employer-owned life insurance
contract, the employee must provide
written consent (a) to be insured under
the contract and (b) that coverage may
continue after the insured terminates
employment.
Note. The written consent is not valid
unless the related employer-owned life
insurance contract is issued (see Issue
date of contract on page 1) within a year
after the consent was executed, or
before the employee terminates
employment with the trade or business
of the applicable policyholder, whichever
is earlier. For additional notice and
consent requirements that may apply,
see item 1 under Notice and consent
requirements on page 1. Also, see
Q&A-9 in Notice 2009-48 for more
information.

Paperwork Reduction Act Notice
We ask for the information on this form
to carry out the Internal Revenue laws of
the United States. You are required to
give us the information. We need it to
ensure that you are complying with these
laws and to allow us to figure and collect
the right amount of tax.

2

You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records
relating to a form or its instructions must
be retained as long as their contents
may become material in the
administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required
by section 6103.
The time needed to complete and file
this form will vary depending on
individual circumstances. The estimated
burden for individual taxpayers filing this
form is approved under OMB control
number 1545-0074 and is included in the
estimates shown in the instructions for
their individual income tax return. The
estimated burden for all other taxpayers
who file this form is shown below.
Recordkeeping . . . 2 hrs., 23 min.
Learning about the law or the
form . . . . . . . 1 hr., 00 min.
Preparing the form . . 1 hr., 4 min.
If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form
simpler, we would be happy to hear
from you. See the instructions for the
tax return with which this form is filed.