Captive Insurance 831(b) 2027 Tax Calculator
IRC 831(b) small captive 2027: premiums up to $2.85M (2025 limit indexed) elect to be taxed only on investment income, not underwriting profit. Allows risk transfer + tax deferral. IRS has flagged abusive 'micro-captives' — must have real insurance economics (risk distribution, risk shifting).
831(b) Election
Small insurance companies elect to be taxed only on investment income, not underwriting. Useful for risk transfer + tax deferral.
2027 Premium Cap
Projected $2.85M (was $2.45M in 2017 reform). Indexed annually. Above cap = standard 831 taxation.
IRS Scrutiny
'Micro-captive' abuses flagged — purported insurance with no real risk transfer. Notice 2016-66 made some Listed Transactions (mandatory disclosure). Bona fide captives still legitimate.
Source and Disclaimer
IRC 831(b), Notice 2016-66. Captives are complex — engage qualified actuary + captive manager + tax counsel before formation.
Source: IRC 831(b), IRS Notice 2016-66. Last updated: May 2026.