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Visitor II

Disability insurance - does an inheritance effect my disability insurance qualification?

I am 61 receiving disability insurance. I'm about to receive a $30,000 inheritance, will this effect my disability benefits?

1 Comment
Catalyst V

Disability insurance - does an inheritance effect my disability insurance qualification?

With some exceptions, an inheritance is not taxable or reportable on any tax return. So it would have no effect. The taxability of the inheritance depends on exactly what you inherited. For example, an inherited traditional IRA or 401(k) is taxable income to the beneficiary recipient, in the year the beneficiary recipient withdraws the funds. You'd be sent a 1099-R reporting that at tax time.

But overall, being that it's not "earned" income, it most likely would not affect your disability qualifications. That would depend on the source of the disability and what their rules and requirements are.