Disability Insurance

Are private disability insurance benefits taxable?


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Wiki User
2013-02-09 16:33:31
2013-02-09 16:33:31

Individual disability insurance benefits are not taxable, because the premiums are paid with after-tax money.

The employer paid disability insurance policies have taxable benefits due to the fact that premiums are paid by the employer with pre-tax money.


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Taxation of disability benefits from a private disability insurance policy are based on whether the premiums are being expensed or not. Assuming that the premiums are not expensed and you are paying with after-tax dollars, your benefits will not be taxable.

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SS retirement benefits ARE taxable - SS disability benefits MAY be taxable depending upon circumstances. See the Related Link below.

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Determining if the benefits are taxable depend supon whether the premiums were paid before or after taxes. If before taxes, the disability income you receive is taxable. If youpremiums were paid after taxation, the disability income benefits you receive are not taxable.

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IF you paid the premiums with before income tax funds for this private disability insurance the amounts that you receive is NOT taxable income to you.

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Your VA Disability check is NOT taxable. VA Disability is a compensation NOT earned income.

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