Premiums paid to foreign insurers not licensed in the U.S. are subject to a federal excise tax — 4% on casualty insurance and indemnity bonds, 1% on life, accident, and reinsurance. It's reported on Form 720 as IRS No. 30. EasyFile720 files it for you.
Under IRC §§ 4371–4374, a federal excise tax applies to premiums paid to a foreign insurer or reinsurer — one not authorized to do business in the U.S. — on policies covering U.S. risks. The rate is 4% for casualty insurance and indemnity bonds and 1% for life, accident, and reinsurance, reported on Form 720, Part I, as IRS No. 30. It exists so that buying coverage offshore doesn't escape the tax that applies to domestic insurance.
An insurer or reinsurer that is not authorized (licensed) to do business in the U.S. Premiums paid to such an insurer on U.S. risks trigger the tax. Premiums paid to a U.S.-licensed insurer generally do not.
Primarily, the person who pays the premium to the foreign insurer (or to a nonresident broker or agent). If they don't, liability shifts to whoever issued or sold the policy, or to the insured. It is reported on Form 720 as IRS No. 30.
The gross consideration paid to assume and carry the risk — the gross amount, not net of commissions or ceding allowances. Applying the rate to a net figure is a common way filers underpay.
When the insurer is U.S.-licensed, when a valid tax-treaty exemption applies (subject to anti-conduit rules), or for wholly-foreign reinsurance between two foreign parties (see below).
The rate depends on the type of coverage. EasyFile720 applies the correct rate to each premium type automatically.
| Type of coverage | Rate | IRC |
|---|---|---|
| Casualty insurance & indemnity bonds | 4% of premium | § 4371(1) |
| Life, sickness & accident insurance, and annuity contracts | 1% of premium | § 4371(2) |
| Reinsurance (covering the above) | 1% of premium | § 4371(3) |
Rates are figured on the gross premium under IRC § 4371. Source: IRS / Instructions for Form 720 (IRS No. 30).
In Q2 2026 a U.S. business places coverage with insurers not licensed in the U.S.: $500,000 in casualty premiums and $150,000 in life/accident premiums.
Casualty (§ 4371(1)): $500,000 × 4% = $20,000. Life/accident (§ 4371(2)): $150,000 × 1% = $1,500.
Quarterly tax: $20,000 + $1,500 = $21,500 — reported under IRS No. 30. (Figured on gross premiums, not net of brokerage.)
Several U.S. income-tax treaties exempt premiums from the section 4371 excise tax, subject to anti-conduit rules. Some foreign insurers hold IRS closing agreements under the Federal excise tax exemption program. If you rely on a treaty exemption, keep documentation supporting it.
Following the Validus Reinsurance decision (and consistent with Rev. Rul. 2008-15), the IRS no longer applies the 1% tax to reinsurance premiums paid by one foreign insurer or reinsurer to another foreign reinsurer — ending the "cascading" tax on wholly-foreign reinsurance.
Report your taxable foreign premiums under IRS No. 30 — EasyFile720 applies the right rate and assembles the return.
Total the foreign premiums paid in the quarter
Gather premiums paid to foreign (nonresident) insurers or reinsurers not authorized to do business in the U.S., separated by type (casualty vs. life/accident/reinsurance). Use the gross premium.
Apply the correct rate
4% for casualty insurance and indemnity bonds; 1% for life, sickness, accident, annuity, and reinsurance premiums. EasyFile720 applies the right rate automatically.
Exclude treaty-exempt and wholly-foreign reinsurance premiums
Remove premiums covered by a valid treaty exemption or by the wholly-foreign reinsurance carve-out, and keep documentation for what you exclude.
Report under IRS No. 30 in EasyFile720
Enter your taxable premiums; EasyFile720 calculates the tax and populates Form 720, Part I, IRS No. 30 (Foreign insurance taxes).
E-file to the IRS
Review, sign electronically, and submit directly to the IRS by the quarterly deadline.
The tax under IRC §§ 4371–4374 can fall on any person who makes, signs, issues, or sells the taxable insurance/reinsurance document. In practice it is paid first by the person who pays the premium to the foreign insurer (or to a nonresident broker or agent); if they do not, it falls on whoever issued or sold the policy, or on the insured. It is reported on Form 720 as IRS No. 30.
Casualty insurance and indemnity bonds are taxed at 4% of the premium (§ 4371(1)). Life, sickness, and accident insurance, annuity contracts, and reinsurance covering those risks are taxed at 1% of the premium (§§ 4371(2)–(3)).
It applies to premiums paid to foreign insurers or reinsurers that are not authorized to do business in the United States, covering U.S. risks. If the insurer is U.S.-licensed, this excise tax generally does not apply.
It is about licensing, not ownership: a "foreign insurer or reinsurer" is one not authorized to do business in the United States. A premium placed with such an insurer on a U.S. risk is taxable even if arranged through a U.S. broker.
The gross premium. The taxable amount is the full consideration paid to assume and carry the risk — not the amount net of commissions, brokerage, or ceding allowances. Using a net figure understates the tax.
No. Following the Validus Reinsurance decision (and consistent with Rev. Rul. 2008-15), the IRS no longer applies the 1% section 4371(3) tax to reinsurance premiums paid by one foreign insurer or reinsurer to another foreign reinsurer — so-called wholly-foreign or "cascading" reinsurance.
Yes. Certain U.S. income-tax treaties exempt premiums from the section 4371 excise tax, subject to anti-conduit rules, and some insurers hold IRS closing agreements under the Federal excise tax exemption program. If you rely on a treaty exemption, keep documentation supporting it and consult your tax advisor.
Every rate and rule on this page comes straight from IRS guidance. Confirm the details yourself:
This page is general information, not tax advice. Foreign insurance excise tax (IRC §§ 4371–4374) interacts with treaties and anti-conduit rules — confirm your treatment against the IRS sources above and your tax advisor before filing.
IRS No. 30 on Form 720 — the right rate applied automatically. Free to get started, pay only when you file.