Is Short Term Disability Insurance Tax Deductible?

  1. 1575 POINTS
    Christopher Lawrence
    Insurance Broker | Financial Consultant, Lawrence Insurance Consulting, Southern New Jersey
    The premiums for a disability policy that a individual obtains through their employer can be payed with pre-tax Section 125 funds, or as it is generally structured after-tax (FICA/FUTA) dollars. As with most insurance policies either the policy holder can pay taxes as they go or at the time that they start to collect from the policy- same basic principal that differenciates IRA's from Roth IRA's. The STD benefit payments themselves are viewed as 'wages' with regard to tax-liabilities, so no they can not be deducted.
    Answered on July 12, 2013
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