All premiums are paid for by the disabled person. Do payments from this policy have to be reported as part of income?
Do payments from a private disability policy have to be reported as income
Jun 10, 2014
3 Replies
Assuming this is not an employer provided fringe benefit, the payments from the company are not income if you did not deduct the premiums.
A comment some company paid disability payments are 'grossed up' so the funds received are not taxable.
So others will understand how this works.......typically...
The employer adds to the employee's pay the amount of the insurance premium as a taxable fringe benefit. Then if the employer so desires, the amount of the premium is grossed up to cover all the taxes.
In this manner the employee is deemed to have paid the premiums making any disability payments tax-free.
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