In this post, we provide a quick overview of a Wage Loss Replacement Plan and who qualifies.
Business owners are always looking for expenses to be tax deductible. Normally, if you want to use your company’s bank account to pay for personal disability policy, you will need to remember to include premiums as taxable income each year to ensure benefits at claim time are received tax-free.
However, there is a way that business owners can write off premiums and not include in their taxable income each year and the concept is called a Wage Loss Replacement Plan (WLRP). This can also be used for a group of key employees.
How Would I Qualify? To qualify for a WLRP, a business needs to be incorporated and there needs to be 2 insured individuals as part of a defined class of employees within the company. The insured individuals also need to be drawing a reasonable T4 salary.