Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

Are AFLAC benefit payments for maternity taxed?

2 Answers

Relevance
  • 1 decade ago
    Favorite Answer

    When we had AFLAC at my previous job, I asked the same question. They told me that if I paid the premium with pretax dollars, like from my flexible spending account, the benefit money would be taxable, but if I paid them with post-tax dollars, they would be tax free, because I paid the tax on the income I bought the policy with.

    I also found this statement:

    The Internal Revenue Service (IRS) considers disability benefits under your employer sponsored plan a continuation of your salary; better known as a Third Party Sick Pay plan. Whether your disability benefits are taxable depends on your level of premium contribution. In general, if you pay 100% of the premium for your coverage with post-tax dollars, your disability benefits are tax-free. If your employer pays 100% of the premium, benefits are taxable. If you and your employer each pay a share of the premium, benefits are taxed proportionally based on applicable IRS rulings. Each claim is unique and your taxability will be dependant on the information provided to us by your employer at the time your claim is submitted.

    (Reference http://www.irs.gov/pub/irs-pdf/p15a.pdf; pg.13, Section 6: Third Party Sick Pay)

  • 1 decade ago

    These are benefit payments, whether maternity or otherwise, tax free.

Still have questions? Get your answers by asking now.