That depends on how you paid the premiums for the short term disability. If the employer shared in the cost for the premiums, then yes, the short term disability is taxable. The payments (claim payments) will be taxable based on the proportion the employer paid towards your premiums, and the portion paid by you if you used after tax payroll deductions. If you paid for the premiums entirely by yourself using after-tax dollars, then the payments (claim payments) are not taxable.