Who pays income tax on death benefit?
Beneficiaries receive the death benefit payment free of ordinary income tax, while annuity beneficiaries may pay income or capital gains tax on death benefits received. Who claims the death benefit on income tax? A death benefit is income of either the estate or the beneficiary who receives it.
Do I report a death benefit on my tax return?
Do not report this amount on the return for the deceased person. If the CPP or QPP death benefit is payable to a beneficiary in the year it is received by the estate, a T3 slip will be issued in the beneficiary's name and the beneficiary will be required to include the amount on his or her T1 return.
Who can apply for a death benefit?
The executor should apply for the benefit within 60 days of the date of death. If no estate exists or the executor hasn't applied for the death benefit, others may apply for the benefit in this order: The person or institution that's paid for or is responsible for paying for the deceased's funeral expenses. How do I file a death benefit?