Tax Deductibility of Disability Insurance Premiums and Benefit Income
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Tax Deductibility of Disability Insurance Premiums and Benefit Income
People often question whether a disability insurance premium is tax deductible. Premiums for group disability income insurance policies are tax deductible by the corporation.
If you have purchased an individual disability insurance program for yourself and you pay premiums personally, this cost is not tax deductible but if your receive income benefits because of disability, this income will not be subject to Federal Income Tax.
If a corporation buys a disability insurance policy on your behalf as part of a corporate benefit program, that is usually deductible for the corporation but the benefits if received because of disability would be taxed as ordinary income. Always check with your tax advisor before you assume any tax deductibility or tax free income issues.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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| Lynne Christen |
