How to File Taxes on a Long-Term Disability Lump Sum

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When filing taxes on a long-term disability, be sure to find out whether the employer paid for it, which is fully taxable, or if you paid for it after taxes, which is not taxable. Find out how to prepare taxes after long-term disability with help from an enrolled agent in this free video on filing taxes.

Part of the Video Series: Filing Taxes
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Video Transcript

My name is Penny Tokash, I'm an enrolled agent in Jonesboro, Georgia. My company is Tax Facts Incorporated. I 'd like to talk to you today about how you file taxes on a long term disability plan, a lump sum disability plan. if it's a private company, you need to find out if you paid for it or if your employer paid for it. Sounds like a pretty simple thing but it isn't necessarily. If it came out of your check after taxes then you paid for it. If the employer has the benefit available and set up a flex spending plan and it came out before taxes, you didn't pay for it. If you paid for the plan, then it is not taxable. So you need to find that information out before your prepare your tax return. If it is paid for by your employer, it's fully taxable.


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