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Form 8925 Report of Employer-Owned Life Insurance Contracts

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Form 8925 (Rev. September 2017) — Report of Employer-Owned Life Insurance Contracts

Department of the Treasury — Internal Revenue Service (99)

▶ Attach to the policyholder’s tax return. See instructions. ▶ Go to www.irs.gov/Form8925 for the latest information.

OMB No. 1545-2089 | Attachment Sequence No. 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. Enter the number of employees the policyholder had at the end of the tax year

2. 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

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

4a. Does the policyholder have a valid consent for each employee included on line 2?

4b. If “No,” enter the number of employees included on line 2 for whom the policyholder does not have a valid consent

General Instructions

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.

Who Must File. 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.

When 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.

Specific Instructions

Name of Policyholder. Enter the name of the policyholder.

Identifying Number. The identifying number of an individual is a social security number. For all other taxpayers, it is an employer identification 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 to be insured under the contract and that coverage may continue after the insured terminates employment.

Page 2 Notes

The instructions on page 2 explain that policyholders generally must file Form 8925 each year they own employer-owned life insurance contracts, except for certain section 1035 exchanges. They also explain that a material increase in death benefit or other material change may be treated as a new contract. The page 2 “Paperwork Reduction Act Notice” states that the estimated burden includes recordkeeping, learning about the law or form, and preparing the form.

Signature

Date

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What the Form 8925 Report of Employer-Owned Life Insurance Contracts Is

Form 8925 is an IRS informational return used to report employer-owned life insurance (EOLI) contracts and determine whether death benefits are includible in the employer’s gross income or subject to tax under the Internal Revenue Code. The form captures contract owner information, insured employee data, contract changes, and whether the employer has shareholder-employee policies. Employers use the aggregated data to calculate potential inclusion amounts and to comply with federal reporting rules for life insurance contracts owned by businesses or partnerships.

Why accurate Form 8925 reporting matters

Properly completed Form 8925 ensures correct tax treatment of employer-owned life insurance proceeds, avoids penalties under IRC §6721 for incorrect information returns, and documents compliance for audits and internal controls.

Why accurate Form 8925 reporting matters

Who typically prepares and reviews Form 8925

Employers, payroll teams, tax preparers, and benefits administrators commonly handle Form 8925 preparation and submission.

  • Corporate tax departments and external CPAs who prepare federal income tax returns and associated informational forms.
  • Human resources or benefits administrators who maintain life insurance records and coordinate insurer data for reporting.
  • Payroll providers and third-party administrators that aggregate employee policy information across multiple contracts.

Final review usually involves the employer’s tax counsel or external preparer to confirm calculations and filing method before submission.

Step-by-step process to complete Form 8925

Follow this sequence to gather, verify, complete, and submit the report accurately.

  • 01
    Collect records: Gather policy statements, carrier reports, and purchase or transfer documents.
  • 02
    Verify identities: Confirm insured SSNs and owner EINs against official records.
  • 03
    Complete form: Enter contract data, monetary amounts, and transaction dates on Form 8925.
  • 04
    Review and file: Have tax preparer review and submit with the employer tax return.

Typical eSubmission workflow for Form 8925

Configure a repeatable digital workflow to collect insurer data, obtain approvals, and attach signed acknowledgements to the electronic filing.

Field Configuration
Document source Carrier PDF statements uploaded to secure storage
Signer order Preparer → Tax manager → Authorized officer
Authentication Email link + optional SMS code or SSO
Archive location Encrypted cloud folder with retention tagging

How electronic completion and signing typically flow

An efficient eSubmission flow reduces manual entry and produces a complete audit trail for Form 8925.

  • Upload: Import policy PDFs and data spreadsheets.
  • Map fields: Populate Form 8925 fields from carrier data.
  • Authorize: Obtain electronic signature from an authorized officer.
  • Attach & file: Attach signed file to tax return submission or retention system.

Timing: when to prepare and file Form 8925

Form 8925 is an annual informational return. Prepare it as part of the employer’s federal tax filing process and confirm due dates with your tax advisor.

Filing alignment:

File Form 8925 with the employer’s income tax return for the year covered.

Return due dates:

Follow the tax return due date (e.g., corporate or partnership deadlines and extensions).

Extension handling:

If the income tax return is extended, attach Form 8925 by the extended filing date.

Record preparation window:

Collect insurer statements promptly after year end to meet filing timelines.

Amended filings:

Amend Form 8925 when material errors are discovered after submission.

Key filing milestones for Form 8925

Track these sequential milestones to ensure timely reporting and evidence retention.

01

Year-End Reconciliation

Collect final policy statements and cash value reports for the calendar or fiscal year.

02

Data Verification

Confirm insured SSNs and policy owner EINs before form entry.

03

Form Completion

Enter contract data, monetary fields, and transaction dates on Form 8925.

04

Tax Return Filing

Submit Form 8925 with the employer’s federal tax return, including extensions.

Penalties and compliance risks for incorrect Form 8925 reporting

IRC §6721 penalties: Failing to file correct information returns can trigger $60–$330 per form penalties, escalating by filing delay.
Intentional disregard: Intentional disregard of filing requirements can result in penalties $660+ per form with no maximum.
Backup withholding: Incorrect or missing TINs may cause payers to apply 24% backup withholding.
Audit exposure: Incomplete or inconsistent policy reporting increases IRS audit risk for the employer.
State-level penalties: Some states impose additional penalties or information filings for employer benefits.
Record retention failures: Lack of adequate records can prevent correction and aggravate penalty assessments.

Common pitfalls to avoid when preparing Form 8925

  • Using abbreviated legal names or incorrect EINs that do not match IRS records can trigger rejects and delays.
  • Relying on outdated carrier statements or failing to include contract transfers and terminations leads to reporting errors.
  • Entering inaccurate insured SSNs or omitting dependent beneficiary changes may cause penalties under IRC §6721.
  • Skipping a formal review by tax counsel or preparer increases the chance of incorrect inclusion calculations.

Key data and security considerations for electronic handling

Encryption: TLS 1.2/1.3 transit and AES-256 at rest
Audit trail: Timestamped signer actions with IP logging
Access controls: Role-based permissions and SSO support
HIPAA readiness: BAA available for protected health information
Compliance reports: SOC 2 Type II and ISO 27001 available
Accessibility: WCAG 2.0 Level AA conformance

Comparing electronic versus paper submission for Form 8925

Choose the submission method that fits your internal controls and filing processes; electronic submission typically improves speed and traceability.

Criteria Electronic file Paper file
IRS acceptance
Processing speed faster slower
Audit evidence detailed audit trail manual records
Amendment handling simpler paper amendment required

Typical eSignature vendor pricing and capability snapshot for filing workflows

Compare monthly starting prices and common features for eSignature vendors used to support Form 8925 workflows. Feature availability and plan limits vary by vendor and plan tier.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Technical requirements for digital completion and storage

Ensure your eSignature and document management platform supports required file formats, integrations, and security controls for Form 8925 workflows.

  • File formats: PDF and DOCX supported
  • Integrations: Salesforce, NetSuite, Microsoft 365 integrations
  • Authentication: Email link, SMS code, SSO options

Choose platforms that provide audit trails, encryption, and retention tagging to meet IRS and internal recordkeeping requirements.

FAQs and troubleshooting for Form 8925 completion

Answers to common questions on who files, signature validity, correcting errors, and electronic submission options.


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