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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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On form 1040 Is disability taxable ?? Is life insurance

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On form 1040
Is disability taxable ??

Is life insurance taxable ??

Robin D. :

Hello and thank you for using Just Answer,

Robin D. :

Insurance amounts paid to the beneficiary (like life insurance) are generally not taxable to the receiver.

Robin D. :

Any interest that may be earned while the money is waiting to be distributed would be taxable but the insurance company would advise if any interest is included.

Robin D. :

Disability is generally not taxable but it depends on who is paying the disability.

Robin D. :

If it is workman's compensation then it is not taxable.

Robin D. :

If the injured person is being paid by an insurance company and that same injured person made all the premium payments

Robin D. :

then it is not taxable

Robin D. :

If the person's employer paid for the disability policy then the payments are taxable.

Robin D. :

So perhaps you can advise what exactly the payments are for

Customer:

This is not workmans comp. issue. Also what about life insurance payments ??

Robin D. :

Life insurance payments answered in my first post, those are not taxable to the receiver when someone dies and the policy is paid.

Robin D. :

It is not workman's comp, what is it?

Robin D. :

Disability can come from an insurance policy and SSA

Customer:

California dis insurance

Robin D. :

Disability Insurance (DI) benefits are not taxable except when considered to be a substitute for unemployment compensation when paid to an individual who is ineligible for unemployment insurance (UI) benefits solely because of the disability.

Robin D. :

If that were the case the person would get a 1099G

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