Does anyone know if an overhead disability policy's benefits are taxable? The insruance company looks at the partially disabled lawyer's financials monthly to determine benefits. Insurance checks are made out in his name and not his S-Corp.
I did not research this but I would think the answer would follow most disability income benefits. Therefore, if the premiums were deducted then the benefits would be taxable. I am reading between the lines here but I think you are possibly inferring, without doing so, that the premiums were paid by the S-corp. If this is so, I would definately say the benefits are taxable. This would follow the logic {if there is any in tax law } that if another entity pays the premium then the payments are taxable.
The sole shareholder of the S-Corp has been making all the payments for a long time. Southern Boy ....your answer makes sense. My only doubts are that I remember some years a go a lady dentist went kinda crazy and her overhead disability was taxable. Yeah, maybe those premiums were paid by her company.
