If I look at this site: www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Pages/Gross-Compensation.aspx#:~:te....
in the third row it shows:
Disability benefit payments, including payments made by third party insurers for sickness or disability | Taxable if paid by employer. | Nontaxable if paid by third-party insurer. |
this does seem to indicate that they are NOT taxed by PA, in any case it would be good for TurboTax to review this so they have it correct either way.
