Qualified Sick Pay plans also known as salary continuation plans are designed to help pay the salaries of key people in the event they become unable to work due to an illness or injury.
If your business chooses to continue paying a salary without a plan in place, those payments will be considered gifts or dividends, rather than compensation for services performed. These payments are taxable to the recipient and nondeductible for the business.
A formal Qualified Sick Pay Plan needs to be in place prior to any sickness or injury and must be part of your normal business documentation.
A plan can be funded directly from the business; however funding with a disability insurance plan removes the burden from the business to the insurance carrier. They will handle most of the paperwork and decisions regarding disability eligibility and most importantly reducing the financial risk to the business.
Qualified Sick Pay Plans
LifePlan Partners © All Rights Reserved.