Disability Insurance

Employees paying premiums on the disability insurance are not deductible by the employee at the time they are made. They can only be deducted later when the claim has being made. This also depends on if the employer has made any contributions to the plan. If the employer has made any contributions to the plan, benefits received by an employee must be included in employment income. However, the cumulative contributions made by the employee to the plan that is paying the benefits can be used deducted. On the other hand, if the employer did not make any contribution to the plan, the premiums paid by the employee are not taxable.