Are taxes withheld from lump-sum payments on active safety member death benefits?
That also depends on the circumstances of the death. If the safety member was killed in the line of duty (service-connected), lump-sum death benefits may qualify as non-taxable under IRS Code. For specifics on your personal situation, consult with a professional advisor. LACERA does not offer tax or legal advice. Lump-sum death benefits based on nonservice-connected deaths are taxable. If you are the surviving spouse or the ex-spouse of the decedent, federal law requires LACERA to withhold 20 percent in federal income tax. The law requires LACERA to withhold ten percent in federal income tax if you are the surviving domestic partner or other non-spouse beneficiary. Additionally, LACERA must withhold an additional two percent in state tax if the recipient resides in California.
