Question
Non-taxable benefits have become taxable.
I am a retired physician with incurable mantle cell lymphoma. Standard Insurance has been paying tax free disability payments since June 2022. In December, while I was having confusion problems from chemotherapy, I received a letter from Standard Insurance informing me I had to file for Social Security Disability. They told me my benefits would be reduced by $3,600 if I did not apply. They did not notify me until December and because of this I received a lump sum payment of $30,425. Since I’ll also receive 8 monthly payments this year, my total SS Disability for this year will be $62,923.10. This amount is so large it will increase our taxes by $8,049. My disability payments are supposed to be tax free. Medical bills for cancer treatments make this difficult for me.
Standard Insurance is also claiming I received $35,458.18 from Social Security when I have only received $33,871. I have problems with mental fog since undergoing chemotherapy and it’s difficult dealing with Standard Insurance and Allsup - the company they told me to use to help with my filing.
Do I have a case for tax reimbursements from Standard Insurance and can they force me to pay the extra money?
Standard Insurance is also claiming I received $35,458.18 from Social Security when I have only received $33,871. I have problems with mental fog since undergoing chemotherapy and it’s difficult dealing with Standard Insurance and Allsup - the company they told me to use to help with my filing.
Do I have a case for tax reimbursements from Standard Insurance and can they force me to pay the extra money?
Answer
I am sorry to hear what you are going through. We have seen you exact fact pattern with tax on ssdi when you were not taxed for the same amount received from Standard. You should send them your argument and see if they will offset the amount after taxes. I can tell you that they likely will not. Unfortunately there is no case law that I am aware of that supports your position.
