Expert: Kyla Kelim - 11/16/2008

Question
I have receiving LTD payments from Aetna since September 2007.  Aetna contracted to Alsup who managed to get me a social security disability payment lump sum in July 2008.

I paid this lumpsum to Alsup.

I am now receiving a SSDI payment and a modified payment from Aetna which is now the original amount minus the SSDI amount.

My questions are:

1) Will Alsup or Aetna send me a W2 or other document showing that I paid the lump sum over to them so that I do not have to pay taxes on this amount.

2) Will social security send me a W2 or its equivalent for the SSDI payments I am receiving.

Thanks in advance  

Answer
Gerald, I have answered the tax question before, there is a publication you will need to look at here:  Publication 17 on irs.gov:

Disability income.   Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. However, certain payments may not be taxable to you. Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension. In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury.

Also, there are references for both "assignment of income" which is includable, and "repayment of income" which is a deduction or credit.  I would contact a CPA to get a definitive answer for the first question.

second, yes, you will get a ss-1099 that shows your disability payments in January for the previous year.

I hope this helps,

Kyla Kelim