Was the short term disability income reported on your W-2 from your employer? If not, you may receive a second W-2 from an insurer reporting taxable short term disability. Contact your regular employer to find out whether you should have received this paperwork.
Taxable short term disability benefits will be reported on a W-2 and, in TurboTax Online, reported under Federal / Wages & Income / Your income / Job (W-2).
Short term disability (STD) payments can take one of two forms. They can be a taxable wage replacement benefit, or a non-taxable insurance benefit. Whether a STD benefit is taxable or not depends on who is paying the premium to the insurance company.
If your employer pays the premium for the disability insurance product, then any payment you receive is taxable to you as a taxable wage replacement payment. The insurance contract is considered to be a "wage replacement" and not a pure insurance payment.
If you, the employee, purchase the insurance product with after tax money, than the payment of the benefit is not taxable income to you. The payments you receive are not considered to be a wage replacement payment.
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