Hal_Al
Level 15

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It depends. If you get a tax document (W-2 [box 1] or 1099-R) for the payment, it's taxable.

The rule is if you paid the insurance premium, with after tax money, the disability benefit is tax free. If your employer paid the premium (as in most cases) or you paid the premium with pre-tax money, the benefit is taxable.

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