Guest PA consultant Posted January 14, 2005 Report Share Posted January 14, 2005 If a local government employee's service-connected disability pension benefit is deemed to be non-taxable (ie. considered in the nature of workers' compensation), is it non-taxable for life? The answer to this question in the Governmental Plans Answer Book (Q 11:43) basically says that it is only non-taxable until retirement eligibility. But in parentheses afterward it says that the tax treatment of disability payments subsequently changed and that this statement is not useful in describing current tax treatment of disability. I can't find anything about the current tax treatment of disability pensions in the 2005 Cumulative Supplement. Link to comment Share on other sites More sharing options...
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