How does the tax treatment of disability income benefits depend on who paid the premiums?

Question

Accepted Answer

Benefits are tax-free if the insured paid the premiums with after-tax dollars; benefits are taxable if the employer paid the premiums

Answer

Benefits are always tax-free regardless of who paid the premiums

Answer

Benefits are always taxable regardless of who paid the premiums

Answer

Benefits are taxable only if paid by the insurer in a lump sum

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