What are the tax implications of my corporation paying critical illness premiums for me? What if I pay them personally?
Allan Madan, CA
Critical illness (CI) does not have specific mention in the Income Tax Act. It depends on the exact circumstances whether a CI policy resembles more to a life insurance or a sickness/accident insurance.
CI premiums paid by the corporation are not deductible. When the policy value is paid to the corporation on diagnosis of a critical illness, that benefit will be tax-free.
The same treatment applies to individuals (i.e. not deductible, not taxable).
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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