I was pulled from work and on NYS short term disability for 6 months. How do i claim this income?

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TurboTax Deluxe Online

S

SundayInSalemAnswer

Level 8

Expert Reviewed

It depends. Disability income may or may not be taxable, depending on who paid the premiums. If your disability is taxable, the taxable amount is generally included on your W-2 or Form 1099.

If you and your employer share the cost of a disability plan, you are only liable for taxes on the amount received due to payments made by your employer. So, if you pay the entire cost of a sickness or injury plan with after-tax money, you do not need to pay tax on payments you receive under the plan as income.

If your employer pays half the cost of premiums and does not deduct these payments from your pay, then you most likely need to report half the payments received as taxable income. Reimbursement of medical costs you’ve paid for after the plan was established are generally not taxable, but may reduce the amount of any medical costs deduction.

For more info see this awesome TurboTax article Are Short-Term Disability Claim Payments Considered Earnings?

S

SundayInSalemAnswer

Level 8

Expert Reviewed

It depends. Disability income may or may not be taxable, depending on who paid the premiums. If your disability is taxable, the taxable amount is generally included on your W-2 or Form 1099.

If you and your employer share the cost of a disability plan, you are only liable for taxes on the amount received due to payments made by your employer. So, if you pay the entire cost of a sickness or injury plan with after-tax money, you do not need to pay tax on payments you receive under the plan as income.

If your employer pays half the cost of premiums and does not deduct these payments from your pay, then you most likely need to report half the payments received as taxable income. Reimbursement of medical costs you’ve paid for after the plan was established are generally not taxable, but may reduce the amount of any medical costs deduction.

For more info see this awesome TurboTax article Are Short-Term Disability Claim Payments Considered Earnings?

J

jpic

Level 2

I have a similar question - my former employer didn't include the disability payments on my W2 anywhere and the insurance company who paid the disability payment says they should have. I've asked them to correct the W2, but they're dragging their feet - where do I enter the disability amount if they don't amend the W2?

MarilynG

Alumni - Intuit

If your employer does not issue a Corrected W-2, you can add the income to your tax return as follows:

Log in to your account and go to your return
Click on Federal
Wages & Income
I'll choose what I work on
scroll to Less Common Income
select Start (or Update) for Miscellaneous Income
Select "Other income not already reported on a Form W-2 or Form 1099"
Click through till you get to "Employee compensation that was not reported on a W-2"

Here's more info on Reporting Disability not on W-2.

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A

ARC371

Level 3

Hi @MarilynG!

Similar question for me...

I received a W2 from my employer AND the insurance company I received short-term disability benefits through.

The employer W2 has my STD gross payments in boxes 1, 16 and 18 (I live in Michigan and work in Pontiac so this is my Federal, State and Local wage boxes, respectively). They also show the Social security tax and Medicare tax withheld in boxes 4 and 6. However, they do NOT show the Federal tax that the insurance company withheld in box 2 (I filled out a W4-S to have federal taxes withheld from my STD checks). I don't understand why the Federal tax is not showing up but everything else is. The "Third-party sick pay" box is also checked in box 13.

I ALSO received a W2 from the insurance company showing the correct Wages, Federal income tax, Social security tax and Medicare tax withheld (so boxes 1, 2, 3, 4, 5, 6, 16 and 17 have figures in them). The "Third-party sick pay" box is also checked in box 13. This W2 is accurate to me.

When I contacted the insurance company, they said they have a tax agreement with my employer so my employer should not be reporting any of my disability information on the W2 they issue to me because that is all reported on a W2 from them (the insurance company).

Is this correct, and my employer needs to update the W2 I received from them to remove the disability payments and Social security and Medicare taxes; and uncheck the Third-party sick pay box? Or can I just make that correction in TurboTax without a W2-C from my employer?

My employer pays 100% of the disability insurance benefit. I was on short-term disability for 2 months in 2022.

Thank you!

Aimee