Third party sick pay (long term disability) from an insurance company taxable income for California?

Forum|Forum|3 years ago
April 12, 2023
1 reply
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I am confused on the issue because the state provided disability insurance (which I am not receiving) does not get taxed per my comprehension of what I have read. This however, does not specifically mention third party disability insurance for California being included or excluded. I appreciate any experience or references to help answer this one.

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Best answer by DaveF1006

According to this State of California source payments made by third parties are fully taxable to an individual. These payments are also known as short-term disability payments. There are exceptions where some payment are not considered third party pay.

Payments made by a third party when the employee has paid the premiums.
Sick pay which is made after the first six calendar months following the last calendar month in which the employee performed services for the employer.
Payments received under a workers’ compensation law and SDI payments.

DaveF1006Answer

Level 15

Payments made by a third party when the employee has paid the premiums.
Sick pay which is made after the first six calendar months following the last calendar month in which the employee performed services for the employer.
Payments received under a workers’ compensation law and SDI payments.

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