Constructive receipt is the term used by the IRS for the amount to include in your income for the year. Your employer must follow the same rules.
For federal income tax purposes, the
doctrine of constructive receipt is
used to determine when a cash-basis taxpayer has received gross income. A
taxpayer is subject to tax in the current year if he or she has an unrestricted
control in determining when items of income will or should be paid.
Maintain your records including, but not
limited to, bank statement, envelope with mail date, etc., with your tax
records.
If you received the income before December 31st then it should be reported on your 2017 return with a corrected W2 from your employer. This would mean you physically received the checks in your possession in 2017. Ask your employer for a corrected form for your tax return.
If your employer did not release the checks to you before the end of the year, then you may have to report the income in 2018. Again, check with your employer about a correction based upon your statement that you did have the disability pay in 2017.
If you employer refuses to provide a corrected W2 and you did receive the money by December 31st, you can choose to use a Substitute W2, Form 4852. The instructions for filing this form are included below, it must be filed by mail per IRS.
https://ttlc.intuit.com/replies/5451995
