Piff Poff

Hiya folks, long time no see! Quick question, i think there is a tax person amongst us?

Do we have to declare husbands long term disability inconcome that he gets from work? He has a T something or other from CPP, but his work just keeps saying his work one is tax free and he doesn't need to declare. It sounds a bit fishy!

TIA

Hemlock

https://grillo.ca/are-long-term-disa...efits-taxable/

JonboyE

The general rule is that if the LTD premiums are paid (100% paid) by the employee, and the employee has not claimed any tax deduction for the premiums, then the benefits are tax free. If the employer has paid any part (even 1%) of the premiums, or if the recipient has claimed any tax deduction for the premiums, then the benefits are taxable.

Piff Poff

thanks, I had done a Google search, it's as clear as mud.

Piff Poff

Thank you.
would there be a T something? Do we not have to disclose the income? We have a T4a from CPP.

JonboyE

Not necessarily. If the insurance company withheld tax, or knows the payments are taxable, they should issue a T4A slip. If you don't get a T4A slip you will have to determine whether or not the benefit is taxable.

ann m

Hi PP, as Jonboy mentioned, if S used to pay his own LTD premiums (as deductions on his paycheque - look up an old one) - then the income he now receives on LTD is tax free which means nothing to report.

On the flip side, if his employer used to pay some or all of the premiums, then S has taxable income and a T form should be issued by the insurance company.

if he was on LTD for the whole of 2023, his employer has nothing to report in the way of earnings/income, so no T4.

You can also call his LTD case manager and just confirm if there is a T form being sent out. 🙂

Piff Poff

thank you.

Pizzawheel

Not a tax expert but I've been on LTD twice in the last few years... if the scheme is set up properly (and I understand they pretty much all are) it's set up to be tax free.

Piff Poff

Thank you.