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Disability Insurance – Secure Tax Free Benefits

DisabilityLong term disability benefit payments are typically tax free when you, not your employer,  pay the premiums. Even if you pay with after-tax dollars via payroll withholding from your own salary, you are considered to pay the premiums with your own money.

The same treatment applies if you are an employee of your own closely held C corporation.

Note: While benefit payments would be tax free, the premiums are nondeductible. (IRC Sections 104(a)(3) and 262(a); Reg 1.104-1(d); IRS Revenue Rulings 75-499, 81-192, and 81-193)

If your employer pays for your LTD premium as a tax-free benefit, those premiums would be tax free to you. However, the actual benefit payments would be taxable income to you if you become disabled.


If you have any questions or require further info please call 718-531-1105 or send an email.


This web site and these articles are not tax or legal advice and are not intended as tax or legal advice.  They are intended to provide only general, non-specific legal information and are not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This web site and these articles are based on United States law.  You should consult with an accountant or lawyer familiar with the issues. This web site and the articles contained on this web site are not solicitations.

Contact Info:

Ronald Semaria
Semaria Consulting
1408 East 66th St
Brooklyn, NY 11234
Email: info@semaria.com

Phone Numbers:

Phone: 718-531-1105
Toll-Free: 866-531-1105
Toll-Free: 888-IRSAUDIT
Toll-Free: 888-RONTAXES
Fax: 718-444-7152

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