Are Heart and Lung Benefits Taxed?

The purpose of the Heart and Lung Act is to provide important public safety personnel with full compensation (full rate of salary) while disabled from an injury that occurs in the performance of one’s duty, along with the payment of medical bills. Heart and Lung benefits are not taxable, therefore, state and federal income tax are not withheld. However, Medicare and FICA taxes are deducted for the first six months of payments. After six months, Medicare and FICA taxes are no longer deducted from Heart and Lung benefits.