Taxability issue on Long Term Disability (LTD)

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PostPosted: Tue Nov 05, 2013 1:23 pm   Post subject: Taxability issue on Long Term Disability (LTD)  

My employer offers LTD as part of standard benefit and they also choose to either make it taxable or not. Are the premiums added directly to my taxable benefits? Or, would I be required to pay the taxes if I receive the benefits on true disability grounds?

I believe taxing is a good deal since the premiums are not that much high and the benefits are so good that it could easily replace my current income.

Unfortunately, a no-brainer to me. So any commentary that would elaborate the pros and cons would be very helpful and appreciable.

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PostPosted: Fri Nov 08, 2013 12:03 am   Post subject:   

By paying income tax on the value of premiums paid by your employer (through "imputed income" added to your W-2 at year end), you will receive the income benefit tax free in the event of a qualifying disability. A small price to pay in exchange for the money you could receive for a lifetime.


CA-licensed Life & Disability Analyst. CA Insurance Lic #0596197. Also investigating insurance company abuses, and providing litigation support/expert witness services. Send me your questions, and I'll send you my answers.
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