Will I have to pay taxes on any settlement you are able to win for me?
The tax treatment of a settlement of a short-term
or long-term disability claim will depend on a number of criteria that
vary from case to case. If the benefits were structured in such a way
that when they are paid out on either a periodic
basis (weekly, bi-weekly, monthly) that they are non-taxable, then a
lump sum settlement would also be non-taxable. When the periodic
payments are part of a taxable benefit plan, the settlement would likely
include a portion that is taxable and a portion
that is non-taxable (arrears would be taxable and amounts considere
future benefits would be non-taxable). The determination of whether
benefits are taxable or not is based on whether the employer paid all or
part of the premiums for the benefits. If they
did, then the benefits would be taxable. If the benefits are paid by
the employer directly (usually short-term claims), they would be
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DISABILITY SECRETS: Learn What Your Insurance Company Is Hiding From You!
This searchable database contains information about disability, critical illness and life insurance claims, and what you can do if you are denied or cut
off of your benefits. It is a collection of the most common questions we receive from our clients. General answers have been provided by our lawyers.