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AFLAC payment..taxable does anyone know?

Posted by vickey__mn (My Page) on
Fri, Mar 26, 10 at 3:09

Okay with all this going on, I have AFLAC coverage for my cancer, and for income protection. The amount of the payment I will receive from my cancer policy is pretty nice (10K+), is that money going to be considered taxable does anyone know? I pay all the premiums through payroll deductions...the Cancer plan was pre-tax dollars, and the income protection was after-tax dollars.

Thanks
Vickey-MN


Follow-Up Postings:

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RE: AFLAC payment..taxable does anyone know?

I assume you mean you are receiving income (claim) and are not talking about your payment of AFLAC premium?

If so, here is your answer.

The IRS considers disability benefits under an employer sponsored plan a continuation of your salary. This is also known as a "Third Party Sick Pay Plan".

Whether these benefits are taxable depends on the amount of premium contribution you pay versus your employer. For example, if you pay all of the premium for coverage with post-tax dollars, those benefits are tax-free. I think this is the part that applies, based on your post.

If your employer pays all the premium, benefits are taxable.

If you and your employer split the premium, say 40/60, benefits are taxed proportionally.

You should receive this information on your W2 received from your employer. If you received a W2, look at box 12A. These payments would be coded with a "j" if they are taxable.

However, all that being said, I would strongly recommend running this by your CPA, if you have one, or your work's HR department, because there are exceptions.

Hope this helps!


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RE: AFLAC payment..taxable does anyone know?

i have AFLAC work disability (sick pay) on my own, not thru my employer. i know that if i use it i would pay income tax at my rate, just as you would for work or unemployment etc.... the lump sum is considered income thou may be taxed at a much higher rate, that you have to check on. i have a friend who used her AFLAC personal accident policy, she paid 30% tax on that and it took AFLAC close to a yr to pay up. after she got her check they dropped her. ~ liz


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RE: AFLAC payment..taxable does anyone know?

You should check with a CPA tax person. To one it may be deductable, to another not. Our tax person told us this year has had the most changes in the laws since 1982. We were able to declare the sales tax on our new car we bought in 2009. One time only.


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RE: AFLAC payment..taxable does anyone know?

I LOVE that duck!!!


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