- 3 -
Respondent determined that petitioners did not report
pension income in the amount of $12,873. Respondent also
determined that petitioners did not report as income taxable
benefits of $5,126 from the $6,030 paid to petitioners by the
Social Security Administration. Petitioners take the position
that the Social Security benefits are subsumed in the section
105(c) exclusion issue.
Both parties argued the case based on the applicability of
section 105(c). Petitioners argue that they are entitled to an
exclusion of the disability payments under section 105(c).
Respondent’s position is that section 105(c) does not apply under
the facts in this case for a number of reasons.
Initially, we find it unnecessary to decide whether the
Minnesota State Retirement System qualifies as a health or
accident plan because petitioners cannot satisfy one of the
requirements under section 105(c).
Pursuant to section 105(a), payments received by an employee
under an employer-provided accident or health insurance plan for
personal injuries or sickness are generally includable in the
employee’s income. However, section 105(c) grants an exception
under which such payments may be excluded from an employee’s
gross income if the requirements of section 105(c) are met.
Section 105(c) provides that:
SEC. 105(c). Payments Unrelated to Absence From Work.–-
Gross income does not include amounts referred to in
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011