Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Received LTD benefit, spoke to the ins co and the lawyers neither are reporting this payment to the IRS, do I need to report such inc and if so how?

taxxman02
Level 3
 
0 Cheers

This discussion has been locked. No new contributions can be made. You may start a new discussion here

1 Solution

Accepted Solutions
sjrcpa
Level 15

No. Taxpayer must have used after tax dollars for the premiums so collecting the benefit is not taxable.

If anything needs total household income, you should include the amount in that.


Ex-AllStar

View solution in original post

0 Cheers
4 Comments 4
taxxman02
Level 3
Client produced a pay stub which showed premium's were pd pretax, I know this settlement should be taxable inc. We asked the ins company and they are not reporting the settlement to the IRS or sending out any third party W-2 or 1099 Misc  to the client nor are the lawyers the client hired to represent her. The client feels uncomfortable not including the inc , should I include it anyway and just add it as other inc, is there something I am missing as to why they aren't reporting the settlement. Any help welcome.
0 Cheers
sjrcpa
Level 15
Is it long-term disabilty benefits? Or is it a settlement for personal injury?

Ex-AllStar
0 Cheers
taxxman02
Level 3
Long Term Disability Benefit. Client was out on personal injury and after two years the ins co said that she has to accept any job, she hired lawyer and they fought it and won a lump sum judgment.
0 Cheers
sjrcpa
Level 15

No. Taxpayer must have used after tax dollars for the premiums so collecting the benefit is not taxable.

If anything needs total household income, you should include the amount in that.


Ex-AllStar
0 Cheers