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Posted by Frederick Lorca on March 13, 2007, 6:46 pm
Please log in for more thread options > I live in Florida and recieve Social Security Disability as
> well as Workman's Compensation from my former employer.
> Also while I was employed I financed a new car through the
> companies credit union........ while doing the papers I
> checked that I wanted the disability insurance. So I am now
> totally disabled and the insurance company pays my car
> payments. Must I claim this as income?
Since you apparently paid the premiums, the insurance
company's payments are not taxable income.
> Also, am I right in thinking I have to pay taxes on my
> Social Security Disability AND my workman's compensation?
Workers compensation is not taxable. However, if you
receive both SSD and workers compensation, your SSD payments
normally are offset by a portion of the workers compensation
you are receiving. This offset is shown on your SSA Form
1099 and the offset amount is treated as SSD received.
The same tax rules govern the taxability of SSD as apply to
social security benefits paid to retirement eligible
beneficiaries. Up to 85% of your SSD could be taxable
depending on the amount of other income, including your
spouse's income if you are married and file a joint return.
To determine if any of your SSD is taxable, see the
worksheet on page 15 of IRS Publication 915.
http://www.irs.gov/pub/irs-pdf/p915.pdf
Frederick Lorca
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