I have been contributing to AFLAC insurance for a few years. I have a disability plan which actually saved my bacon when I was diagnosed with sleep apnea and was disqualified from driving pending tests and an "adjustment" period to adapt to the cpap machine.

I received benefits for the 3 months I was out of work equating to 7200.00

I actually received 6600.00 (I believe some was with held for taxes.

My question is this; Do I need to declare this money on my tax return?

I have not received a statement from AFLAC about wether this money will be reported or not.

Do you know if I am supposed to receive a statement summary? Kinda like an interest statement from your bank on your accounts, or like mortgage interest.

It depends on who paid for the insurance, if you paid for 100% with after tax dollars, then you owe zero tax on this income. If however you paid 60% and the employer paid 40%, then 60% is tax free, and 40% is taxable.

It is known as the tax benefit rule, to the extent you enjoyed a tax free benefit, you have to pay taxes when you receive the income, and it works the other way as well, you are not allowed a tax deduction for disability insurance, and so if you paid disability insurance with after tax dollars, then when you benefit from the income, you are not taxed on it. Now, if they mistqakenly did tax you on it, then you'll have to get them to issue a corrected tax statement, or disclose this matter on form 8275 and explain the circumstances and provide proof that you paid with post tax dollars.

-Marc

Home of the free Per Diem Calculator™
Per Diem Reports

I paid for the AFLAC insurance but it was thru my employer and the money is taken out each week. I am not sure if they get some kind of "discounted rate" or not though.

When it comes to filing our tax returns why is it we are supposed to declare last years tax refund money as money earned this year?

It seems like double taxation to me. They returned my money (that they had all year interest free) and then want to tax me on the money they give back? Sounds mighty fishy to me!

Money you receid in a Federal refund DOES NOT need to be declared.

Refund money from a State Refund DOES need to be declared IF you itemized AND deducted State Income taxes.

-Marc
Per Diem Calculator
info@pdcalc.com

Holy smoke! I have been duped by HR BLOCK for years on this 1 item alone! Oh well I am now even happier I decided to do my own with turbo tax!

Thank you so much Taxguy! I actually learned something new today! Kudos!