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Title 26, Internal Revenue CodeRelease 119-110

§594 Alternative Tax for Mutual Savings Banks Conducting Life Insurance Business

Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter H — Banking Institutions › PART II — MUTUAL SAVINGS BANKS, ETC. › § 594

Last updated Sep 22, 2026|Official source

Summary

Mutual savings banks that have no stock and run a life‑insurance business in a separate department with separate accounts must pay a special tax instead of the regular tax in section 11. The tax is two parts: one on the bank’s non‑insurance income, figured the normal way as if this special rule did not exist, and one on the life‑insurance department’s income, figured under the life‑insurance company rules in subchapter L (sec. 801 and following). This rule only applies if the life‑insurance department would qualify as a life insurance company if it were a separate corporation under section 816.

Full Legal Text

Title 26, §594

Internal Revenue Code, Source: USLM XML via OLRC

(a)Alternative tax
In the case of a mutual savings bank not having capital stock represented by shares, authorized under State law to engage in the business of issuing life insurance contracts, and which conducts a life insurance business in a separate department the accounts of which are maintained separately from the other accounts of the mutual savings bank, there shall be imposed in lieu of the tax imposed by section 11, a tax consisting of the sum of the partial taxes determined under paragraphs (1) and (2):
(1)A partial tax computed on the taxable income determined without regard to any items of gross income or deductions properly allocable to the business of the life insurance department, at the rates and in the manner as if this section had not been enacted; and
(2)a partial tax computed on the income of the life insurance department determined without regard to any items of gross income or deductions not properly allocable to such department, at the rates and in the manner provided in subchapter L (sec. 801 and following) with respect to life insurance companies.
(b)Limitations of section
Subsection (a) shall apply only if the life insurance department would, if it were treated as a separate corporation, qualify as a life insurance company under section 816.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2017—Subsec. (a). Pub. L. 115–97 substituted “tax imposed by section 11” for “taxes imposed by section 11 or section 1201(a)” in introductory provisions. 1984—Subsec. (b). Pub. L. 98–369 substituted “section 816” for “section 801”. 1956—Subsec. (a)(2). Act Mar. 13, 1956, substituted “the income” for “the taxable income (as defined in section 803)”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2017 AmendmentAmendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 13001(c)(1) of Pub. L. 115–97, set out as a note under section 11 of this title.

Effective Date

of 1984 AmendmentAmendment by Pub. L. 98–369 applicable to taxable years beginning after Dec. 31, 1983, see section 215 of Pub. L. 98–369, set out as an

Effective Date

note under section 801 of this title.

Effective Date

of 1956 AmendmentAmendment by act Mar. 13, 1956, applicable only to taxable years beginning after Dec. 31, 1954, see section 6 of act Mar. 13, 1956, set out as a note under section 821 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 594

Title 26, Internal Revenue Code

Last Updated

Sep 22, 2026

Release point: 119-110