No, reverse mortgage payments aren't taxable. Reverse mortgage payments are considered loan proceeds and not income. The lender pays you, the borrower, loan proceeds (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home.

• With a reverse mortgage, you retain title to your home.
• Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die.
• Generally, the interest (including original issue discount) accrued on a reverse mortgage isn't deductible because such interest is considered interest on home equity debt. Even if it’s allowable, the interest still cannot be deducted until you actually pay it (usually when you pay off the loan in full).  For information on deducting mortgage interest and the debt limit that applies, see Publication 936, Home Mortgage Interest Deduction.