Below is a list of frequently asked questions regarding taxes on your disability benefit. Make a selection to get the answer. If you have additional questions, please call us at 1-800-845-2290.
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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)
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Disability benefits will be reported to you on IRS form W-2.
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Yes. Your benefits will be reported in Box 12a and coded with a "J". This means
benefits were paid to you but are excluded from your taxable income. Any amount
reported in this box does not have to be included on your personal tax return.
Any amount in Box 1 is taxable and does have to be reported.
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It will depend on the arrangement your employer has with Unum. In a
large percentage of cases, Unum will prepare and mail to you your W-2.
If you had regular earnings from your employer, you will receive a W-2 from
your employer and a W-2 from Unum. However, in some cases, employers
have opted to include disability benefits with their W-2. You may call the Tax
Reporting Group at 1-800-845-2290 to verify if Unum is preparing your
W-2.
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All W-2s for the 2006 tax reporting year will be mailed by Unum by January
31, 2008. Please allow ample time for delivery by the US Postal
service before calling to check on the status. Should you need a copy of your
W-2, you may call 1-800-845-2290. Please note all copies will be mailed. We are not able to fax
copies. All requests for copies will be handled within 24 hours. Please allow 4
to 6 business days for mail delivery.
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Please call the Tax Reporting Group at 1-800-845-2290.
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Any portion of the refund that applies to the benefits paid in the current year
will be deducted out of the total Unum pays during the current year
when Unum prepares the W-2 in January. You will receive notification
from Unum as to how much, if any, of the refund is applicable to a
prior year. This amount should be taken as a deduction in the year in which you
supplied the refund. Please contact your tax preparer regarding this deduction
and refer him/her to IRS Publication 525, section titled Miscellaneous Taxable
Income-Repayments. With this information, your tax preparer can appropriately
deduct the repayment.
(Reference http://www.irs.gov/pub/irs-pdf/p525.pdf;
pg. 33, Repayments)
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IRS tax form 1099-INT represents interest that was paid to you during the year
by Unum. If you were the beneficiary of a life insurance policy and
received death proceeds during the year, any interest earned before such
payment was made will be reported on form 1099-INT. Please consult your tax
advisor regarding the taxation of this payment.
(Reference http://www.irs.gov/pub/irs-pdf/i1099int.pdf)
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Unum is required to report any payment made in the course of doing
business. Some payments included on form 1099-MISC are for long term care
payments to health care facilities, payments made to medical providers and
survivor income benefits, among others. Please consult your tax advisor
regarding the taxation of these payments.
(Reference http://www.irs.gov/pub/irs-pdf/i1099int.pdf)
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Please contact your dedicated Disability Specialist handling your claim for any
federal and state income tax withholding requests or changes. All requests must
be in writing. You can print off the form from the IRS website, complete it and
fax or mail the form to us at the number or address below.
(To get forms)
Fully insured plans: http://www.irs.gov/pub/irs-pdf/fw4s.pdf
Self-insured plans: http://www.irs.gov/pub/irs-pdf/fw4.pdf
(Mail to)
The Benefits Center, P.O. Box 100158, Columbia, SC 29202-3158
(Fax to)
800-447-2498 (Eastern/Central Standard Time)
877-851-7624 (Pacific Standard Time)
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Please contact your dedicated Disability Specialist for other questions
regarding your claim. You may also contact the Tax Reporting Group at
1-800-845-2290 for tax related questions.
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