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Level 2
February 21, 2021
Question

Short Term Maternity Leave

  • February 21, 2021
  • 3 replies
  • 33 views

If someone purchases a short term maternity leave policy are the benefits received taxable?

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3 replies

qbteachmt
Level 15
February 21, 2021

Who bought it? Who was the insured? How was it paid for?

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sws20501Author
Level 2
February 21, 2021

The taxpayer purchased it on her own

qbteachmt
Level 15
February 21, 2021

In general, based on who paid and if they paid Pre-tax or Post-tax:

• If the employer pays the entire insurance premium, then the sick pay payments received are 100% taxable to the employee.
• If the employer pays a portion of the premium and the employee pays the balance with after tax dollars, then the sick pay payments are taxable in the same proportion as the percentage of the premium paid by the employer.
• If the employer pays nothing and the employee pays the entire premium with pre-tax dollars, then the sick pay payments received are 100% taxable to the employee.
• If the employer pays nothing and the employee pays the entire premium with after tax dollars, then the sick pay payments received are not taxable to the employee.

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