We are often asked if physician disability insurance premiums are tax deductible and whether any benefits received are taxable. The answers depend on your practice scenario:
1. If you are a non-owner employee or sole proprietor, then the premiums are not tax deductible. In the event of a disability, your disability benefit will not be taxable.
2. If you are the owner of a c-corporation, you can deduct the premiums paid for shareholder and non-shareholder employees. In the event of a disability, the benefits will be taxable.
Contact us or your tax advisor if your practice situation does not fit into one of the scenarios above.