You will have to pay taxes on the SSDI benefits. LTDI benefits are not taxed if you paid for them with after-tax income. Prior to 2018, you could deduct the offset payment from your taxes, but this is no longer possible due to the major overhaul of U.S. tax law at the end of 2017. The Tax Cuts and Jobs Act removed all the miscellaneous deductions you could claim on your Schedule A.
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