Do I report a $10K payout from a cancer policy

[Warr-Baby]

I signed up for the policy on my own, not through my employer.  I make monthly payments through my checking account.  Would like to know for both Federal and State taxes.  I live in Alabama.

[LenaH]

No. Since you purchased your own cancer insurance policy and paid the premiums with after-tax dollars, any benefits you receive under the policy are not taxable.

[Warr-Baby]

Thanks for the quick response.  Does this apply to both State and Federal Taxes?  I live in Alabama.

[LindaS5247]

Since you paid for your policy, it should not be taxable on your Alabama state income tax return.

If you purchase your own cancer insurance policy and pay the premiums with after-tax dollars (without any tax savings), the benefits you receive under the policy are not taxable.

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