Personal Finance

LTD premiums - tax-deductible or not?

  • Last Updated:
  • Feb 23rd, 2011 9:03 pm
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Newbie
Feb 23, 2010
89 posts

LTD premiums - tax-deductible or not?

We both paid LTD premiums through our employers. My wife was under my work health plan.

- Now i know that premiums paid to group plan are tax-deductible.
- Are LTD premiums paid by employee tax-deductible ( in other words are they eligible medical expenses)

Gotta pay CRA $600 and looking at ways to minimize tax payable.
3 replies
Deal Fanatic
User avatar
Mar 20, 2009
8862 posts
2636 upvotes
Vancouver
No, not deductible.

The reasoning is that if you pay the taxes on the premiums now, then future possible claim payouts will be tax-free income. Otherwise it would count as taxable income at the time you receive the disability money, when you are less able to afford to pay the taxes.
Deal Addict
User avatar
Dec 28, 2004
1687 posts
130 upvotes
Burlington
They can be pre-tax dollars if your employer pays all of them. But you do not want that. Because of above's reason. If they are post-tax money any money you receive from the insurance is not taxable. So when you get 66% of your income you earn almost the same amount.
Deal Addict
User avatar
Jan 27, 2007
4433 posts
590 upvotes
No, definitely not deductible or a tax credit that can be considered with medical expenses.

At this point the only thing you could probably consider is an RRSP contribution.
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