topic Is private long term disability insurance taxable in Virginia? (It is federally taxable, but TT state questions imply it might not be taxable in Virginia). Thanks! in Retirement tax questions

Is private long term disability insurance taxable in Virginia? (It is federally taxable, but TT state questions imply it might not be taxable in Virginia). Thanks!

bdblack0924 — Thu, 06 Jun 2019 14:21:48 GMT

MaryD — Thu, 06 Jun 2019 14:21:49 GMT

Hi,

As of 2014, out of pocket long term disability insurance payments may not be claimed as a tax credit in VA.

Simply follow the instructions on your VA 760.

bdblack0924 — Thu, 06 Jun 2019 14:21:51 GMT

Just to be clear, I was asking about the treatment of LTD insurance benefit payments not paying LTD premiums. The answer still the same? Thanks.

MaryD — Thu, 06 Jun 2019 14:21:52 GMT

Sounds like those are fully taxed if you are paying for the policy yourself out of your own pocket. Here is a helpful link. <a rel="nofollow" target="_blank" href="https://www.ameriprise.com/research-market-insights/tax-center/tax-planning/taxation-of-disability-insurance/">https://www.ameriprise.com/research-market-insights/tax-center/tax-planning/taxation-of-disability-insurance/</a>

The portion of LTD benefits you receive that is paid by an employer is taxable to you. Federal, state, and local taxes are withheld; Social Security and unemployment taxes are excluded.
The portion of LTD benefits you receive that is paid by you is tax-free, except if you pay with pre-tax dollars.

MaryD — Thu, 06 Jun 2019 14:21:54 GMT

Hi,

As of 2014, out of pocket long term disability insurance payments may not be claimed as a tax credit in VA.

Simply follow the instructions on your VA 760.