Karen1209
New Member

Retirement tax questions

From your detail, it seems that the benefit payments may not be taxable.  It's based on who made the premium payments.

Please see the IRS information below:

You must report as income any amount you receive for your disability through an accident or health insurance plan paid for by your employer:

  • If both you and your employer have paid the premiums for the plan, only the amount you receive for your disability that's due to your employer's payments is reported as income.
  • If you pay the entire cost of a health or accident insurance plan, don't include any amounts you receive for your disability as income on your tax return.
  • If you pay the premiums of a health or accident insurance plan through a cafeteria plan, and you didn't include the amount of the premium as taxable income to you, the premiums are considered paid by your employer, and the disability benefits are fully taxable.
  • If the amounts are taxable, you can submit a Form W-4SRequest for Federal Income Tax Withholding From Sick Pay, to the insurance company, or make estimated tax payments by filing Form 1040-ESEstimated Tax for Individuals.

Amounts you receive from your employer while you're sick or injured are part of your salary or wages.

  • Report the amount you receive on the line "Wages, salaries, ..." on Form 1040Form 1040AU.S. Individual Income Tax Return, or Form 1040EZIncome Tax Return for Single and Joint Filers With No Dependents.
  • You must include in your income sick pay from any of the following:
    • A welfare fund
    • A state sickness or disability fund
    • An association of employers or employees
    • An insurance company, if your employer paid for the plan
https://www.irs.gov/faqs/interest-dividends-other-types-of-income/life-insurance-disability-insuranc...