How are annuities taxed for maintenance tax purposes?
Maintenance taxes are assessed on annuities at annuitization, that is, at the time of purchase. Typically known as back-end reporting, this method does not include funds left with insurance companies in deposit-type accounts. Deposit-type accounts, including deferred-annuity deposits, such as funds received by insurance companies to fund retirement programs and individual annuities to purchase annuity contracts in the future, accumulate interest or investment earnings until either withdrawn or used to purchase an annuity. Maintenance taxes would then be assessed on the total cost of the annuity contract purchased.
