It depends. How your disability income is taxed depends on your situation.
- Department of Veterans Affairs (VA) disability benefits aren't taxable and don't need to be reported on your return, unless it is on a 1099-R
- Social Security Disability Benefits (SSDI) aren't taxable unless you have substantial additional income.
- Workers' comp isn't taxable.
- Car insurance disability benefits for no-fault accidents aren't taxable.
- Disability income paid by an insurance company may or may not be taxable:
- If the premiums were paid by your employer and weren't included in your taxable income, the disability is taxable.
- If you paid the premiums out of your own pocket or with payroll deductions that came out of your after-tax income, the disability isn't taxable.
- If you and your employer jointly paid the premiums, only the disability amount covered by your employer's payments are taxable.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
