Disability coverage taxable

Forum|Forum|2 years ago
October 25, 2023
1 reply
3 views

I received short term disability payments through an insurer with premiums paid by me and my employer with after tax dollars. My employer did not note any disability pay on my W-2 and instead marked all as regular pay. NJ did not accept the TurboTax version and my employer will not revise my W2. What can I provide to NJ to show I was on disability insurance coverage?

Ask the Experts - Extension - Sept 2023

LoriLeighEA

Level 5

Hi SelOsc - Thanks for joining us today!

If you paid the premiums for your short-term disability out of taxed (after-tax money), then your short term disability payments received should be tax free.

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. This link explains in more detail:

https://turbotax.intuit.com/tax-tips/disability/are-short-term-disability-claim-payments-considered-earnings/L0Yn4IiYr

I suggest you contact NJ Division of Taxation and ask what you need to provide to prove you made these payments after tax. If it shows on your paystubs, gather those up as potential proof. Anything you have that shows you paid them such as bank statements, Insurer statements, etc. would all be helpful.

Here is where you contact NJ: https://www.nj.gov/treasury/taxation/emailfaqs.shtml