Why would a disability payment come on a W-2?

Forum|Forum|2 years ago
March 17, 2024
2 replies
4 views

Is this normal for being on LTD?

TurboTax Free Edition Online

xmasbaby0

Level 15

Yes---sometimes disability payments are reported on a W-2. Did you receive disability payments from an employer plan that you paid in to?

https://ttlc.intuit.com/questions/1901145-is-disability-income-taxable

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Monikak11

Level 2

Yes, if the disability income is received through your employer, it may be reported on a Form W-2.

You must report as income any amount you receive for your disability through an accident or health insurance plan paid for by your employer:

If both you and your employer have paid the premiums for the plan, only the amount you receive for your disability that's due to your employer's payments is reported as income.
If you pay the entire cost of a health or accident insurance plan, don't include any amounts you receive for your disability as income on your tax return.
If you pay the premiums of a health or accident insurance plan through a cafeteria plan, and you didn't include the amount of the premium as taxable income to you, the premiums are considered paid by your employer, and the disability benefits are fully taxable.
If the amounts are taxable, you can submit a Form W-4S, Request for Federal Income Tax Withholding From Sick Pay to the insurance company or make estimated tax payments by filing Form 1040-ES, Estimated Tax for Individuals.

Amounts you receive from your employer while you're sick or injured are part of your salary or wages.

Report the amount you receive on the line "Total amount from Form(s) W-2, box 1"

See this IRS FAQ for more information.

@robbaway13

Opus 17

Level 15

If the employer paid the premiums tax-free to you, then the LTD is taxable income. Because it is a substitute for wages, it is reported on a W-2, if you are under your regular retirement age.