On Nov. 5, 2026, the IRS published Revenue Procedure 2026-35, which provides tax year 2027 inflation adjustments for almost 70 tax provisions.

Insurance companies that have made the small insurance company election under section 831(b), which taxes them only on investment income, may write up to $3,000,000 in premiums in 2027 and exclude underwriting income from taxable income. The 2027 limit is $100,000 higher than the 2026 amount of $2,900,000.

The increase is twice last year’s because of how the limit is indexed. The statutory base of $2,200,000 is adjusted annually for inflation and then rounded down to the next lowest multiple of $50,000. I.R.C. § 831(b)(2)(E). This year’s adjustment carried the unrounded amount past two $50,000 thresholds instead of one.

Owners and advisors should consider how the additional premium capacity may affect their 2027 tax planning.  If you have any questions regarding this tax update or other insurance matters, please contact a member of your Springline Advisory team:

• Laurie Bizzell
• Ian Osler
• Patrick Cullen
• Eli Colmenero