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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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Is Life/Accident/Cancer insurance payroll deduction, is it –

Customer Question

for Jonathan Tierney" Is Life/Accident/Cancer insurance payroll deduction, is it – Pre Tax?
Submitted: 20 days ago.
Category: Tax
Expert:  Jonathan Tierney replied 20 days ago.

Life insurance would be an after tax deduction as life insurance proceeds (at death) are always tax-free. Disability policies, such as accident and cancer insurance can be pre-tax if there is an IRC 125 plan in place. See https://www.benefitadministrationcompany.com/blog/faqs-for-your-section-125-cafeteria-plan/ and the attached pamphlet. The link and pamphlet above are from companies that help employers' set up 125 plans though I am not familiar with either company. If there is no formal IRC 125 plan in place, then all the payroll deductions would be after-tax.

Customer: replied 20 days ago.

Gotcha. Yes, there is a IRC 125 in place.

Thank you. You are always on point.

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