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Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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My name is ***** *****. I just received notice from IRS that

Customer Question

Hi, my name is ***** *****. I just received notice from IRS that Lina Benefit Payments Inc sent them a W2 indicating $5,801.00 as income for me for 2014
JA: Thanks. Can you give me any more details about your issue?
Customer: I was on Cigna disability through my employer at that time, on my W2 Box 12b shows DD $10,347.20. It also shows pre-tax medical plan. The IRS is now indicating I OWE almost $1,000.00 in tax and penalties based on the W2 received from Lina I never received any W2 from them, have never received any additional tax responsibility on disability benefits.
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Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

The question would be - did you actually receive disability benefits from that company?
If yes - who paid for the disability insurance - you with after tax money or your employer?

Customer: replied 1 year ago.
I received disability benefits from CIGNA, my employer paid for the disability insurance
Customer: replied 1 year ago.
From the google searches I've done, it appears LINA is somehow affiliated with CIGNA. My payments (short term disability) came directly from CIGNA - I never had any dealings with LINA
Expert:  Lev replied 1 year ago.

W2 Box 12b shows DD $10,347.20 report the amount your employer paid for your medical insurance - that amount is not reported on your tax return - and is for your information only.

Regarding disability benefits

If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled.

Expert:  Lev replied 1 year ago.

Generally - such payments are reported on W2 as third party payments - subject to income tax -but not subject to social security and Medicare taxes.

Life Insurance Company of North America (LINA) is a separate company but it belong to the same group as GIGNA - so they might share responsibilities - but it looks as your income is taxable.

I am not clear why you did not receive W2 from that third party... - that is a separate issues.

Because of that you might ant to ask the IRS to drop possible late payment penalties.


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