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Staufway
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LTD - Long Term Disability - Need to Claim as Income or Not?

(1)
My spouse was an employee of Sun Life who went on Short-Term then Long-Term Disability. 

The Short-Term Disability amounts do appear to get the usual tax deductions while the Long-Term Disability does not appear have federal/provincial taxes deducted showing a balance of zero tax deducted. 

Does this mean spouse will need to claim the 2 months (Nov-Dec) of LTD amounts as income and if so - whereabouts on the Turbo Tax would we indicate this amount.  

1 Reply

LTD - Long Term Disability - Need to Claim as Income or Not?

Whether the benefits are taxable or not is based on who paid the premiums. If the benefits are taxable, you'll get a tax slip to enter on your tax return. If you don't get a slip, then the benefits are not taxable and nothing needs to be entered on the return.

 

As per Sunlife:
Employer-paid short-term disability or long-term disability premiums are not taxable benefits. But any short- or long-term disability benefits you receive in the future from your employer will be taxable. Conversely, if all employees pay their own short or long-term disability premiums, any benefits they receive are tax-free. The same applies to premiums you pay for an individual policy you own. If you pay premiums yourself, using after-tax money, any benefits you receive are tax-free. 

 

 

 

 

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