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Whether or not you pay tax on the LTD benefits depends on how the premiums for the policy were paid
If the policy was provided by an employer, it's taxable.
However, if you paid for the policy with after tax money, the benefits are not taxable.
Also, a lump sum pension benefit is also taxable.
Pension benefits are taxable the year that you receive the funds.
You can read about the taxation of pension benefits, HERE
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