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Disability Repayment with Tax - How to deduct tax?

Forum|Forum|6 years ago
September 24, 2019
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I applied for disability insurance this year, the claim was denied and I ended up having to reimburse the company for the tax amount of the initial check I received.

The company said I could deduct this on my W2 but gave no instructions.

What do I need from the insurance company to deduct taxes related to a denied disability claim?

Best answer by

since you didn't have to repay the full amount received but in fact only had to reimburse the company for the taxes, that means the gross payment is taxable. thus you should get a tax form reporting both the gross payment and taxes you paid them

if it was your "employer" that made the payment to you, it will be on your W-2 most likely. if it was an insurance company then most likely a 1099-misc

but yes to claim the tax payment, some form will need to be issued by the payer, a copy of which will go to the IRS.

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Anonymous

Answer

since you didn't have to repay the full amount received but in fact only had to reimburse the company for the taxes, that means the gross payment is taxable. thus you should get a tax form reporting both the gross payment and taxes you paid them

if it was your "employer" that made the payment to you, it will be on your W-2 most likely. if it was an insurance company then most likely a 1099-misc

but yes to claim the tax payment, some form will need to be issued by the payer, a copy of which will go to the IRS.