disability pay

kat92365 — Sat, 18 Aug 2018 00:52:01 GMT

Question - my husband and I filed our taxes last year as usual. However, about 9K of his income was disability pay not his regular salary b/c he was quite ill for some time. On his check stub it says, "Disability Pay". Should we not have counted this as regular income?

Also, this year, 6/25-now (And probably for a while going forward.), he is also on Disability pay. Its not Social Security disability, it's through his company, like an insurance policy, AETNA, I think.

Thanks,

Kat

P.S. Also, if we shouldn't have included it as regular income last year, how do I fix it now?

Re: disability pay

Carl — Sat, 18 Aug 2018 03:25:34 GMT

Weather or not disability pay is taxable is a separate issue from determining if it's reportable. If it's reportable, then you will receive some type of tax reporting document for it. Could be a completely separate W-2, or included in the normal W-2, reported separately on a 1099-MISC or some other tax reporting document. So if the income was included in his regular W-2, or reported on a separate tax reporting document, then it's reportable. With TurboTax, if you just pay attention to the follow up screens after entering the tax reporting document, your responses on those screens will help determine if it's taxable or not.

Now with your reference to AETNA what you are calling disability pay, may not be "actual" disability pay. But here's how this works in most *not all* cases.

If you pay premiums for this coverage and if the premiums you pay are NOT included in your taxable income, then any payout on the policy "is" taxable income.

If you pay taxes on the premiums you pay for this coverage, then any payouts of that coverage are "usually" not taxable.

Now the above two situations are not a hard fast rule. There are other factors that figure into this also. But the one rule that is a hard fact, is that if you get a tax reporting document for the income, then you are required to report that income. But like I said, it's taxability is a separate issue.

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disability pay

Re: disability pay