IQVIA Benefits Handbook
TAX TREATMENT OF LTD BENEFITS
Because IQVIA pays for your LTD coverage, any benefit payments you receive are subject to federal and state income taxes. You may want to consult with your tax advisor regarding the proper income tax treatment of your benefit payments.
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Up Close and Personal: Mark
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Mark works for IQVIA and is making $36,000 a year ($3,000 a month) when he becomes disabled. Under the LTD Plan, Mark is entitled to receive a total of $2,000 a month (60% of monthly earnings) from all disability income sources. He does not participate in the Rehabilitation and Return to Work Assistance program, but receives $600 a month from Social Security. Here's how his LTD benefit is calculated:
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Total monthly LTD benefit (60% of monthly earnings)
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$1,800
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Less monthly primary Social Security benefit
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– $600
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Mark's monthly LTD benefit
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$1,200
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Mark still receives $1,800 a month: $600 from Social Security and $1,200 from the LTD Plan. The LTD benefit is taxable.
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Note: This example assumes that Mark doesn't receive family Social Security benefits.
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