Tax Rules: Final: 5703-7
5703-7-08 - Deduction of disability
and survivorship benefits
In accordance with Section 5747.01(A), Revised Code, a
taxpayer may deduct, to the extent otherwise included in
Federal Adjusted Gross Income, the amount of disability
benefits received pursuant to a contributory or
non-contributory employee disability and survivorship plan;
provided, that the establishment of the employee's permanent
or presumed permanent inability to engage in gainful
employment for which qualified by training or experience as a
result of a physical or mental impairment is a pre-condition
to the receipt of such benefits.
A taxpayer may not deduct, as disability benefits, any "sick
pay" or similar temporary wage and salary continuation
payments, nor any payments received under a plan, regardless
of the nature of such plan, if the plan deems such payments
to be, or in lieu of, retirement benefits, annuities, or
distributions. Payments initiated as disability benefits are
deemed retirement benefits, annuities, or distributions,
subject to separate Ohio tax treatment, when, by virtue of
the attained age of the employee or any other cause, the plan
no longer requires the pre-condition of physical or mental
impairment for the receipt of such benefits.
In accordance with Section 5747.01(A), Revised Code, a
taxpayer may deduct, to the extent otherwise included in
Federal Adjusted Gross Income, the amount of survivor
benefits received as a qualified survivor pursuant to a
contributory or non-contributory disability and survivorship
plan. A taxpayer may not deduct, as survivorship benefits,
any payments received under a plan, regardless of the nature
of the plan, if such plan deems the payments as other than
survivorship payments or authorizes payments without the
death of a covered employee as a pre-condition. Annuities,
lump sum settlements, retirement payments, or other similar
benefits received by a beneficiary under an option or
election made by an employee and commencing upon such
employee's death, are not deductible as survivor benefits,
but are deemed retirement benefits subject to separate Ohio
tax treatment.
Effective: 11-24-75 as TX-47-08
Promulgated under: 5703