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Do I report receiving short term disability on my taxes in California? Box 14 on my w2 is "SDI C" if that matters.

Started receiving disability in november 2022 and will cease in march 2023.
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Vanessa A
Expert Alumni

Do I report receiving short term disability on my taxes in California? Box 14 on my w2 is "SDI C" if that matters.

It depends.  If you pay the full premiums with after tax dollars (meaning you did not get any type of state tax benefit for the premiums) for the short term disability insurance, then it is not taxable when you receive the payments.  

 

If your employer paid the premiums, then it is taxable, just like your normal wages are taxable.  If you did not pay taxes on the premiums, then the benefits would be taxable.

 

If you paid part of your premiums and your employer paid the other part of your premiums, then you would prorate the amount that is taxable.  So, if you paid half of the premiums (with after tax dollars) and the employer paid half of the premiums, then your benefits would be 50% taxable (or prorated based on employer/employee contribution rate)

 

This is also true for your federal return. 

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3 Replies
Vanessa A
Expert Alumni

Do I report receiving short term disability on my taxes in California? Box 14 on my w2 is "SDI C" if that matters.

It depends.  If you pay the full premiums with after tax dollars (meaning you did not get any type of state tax benefit for the premiums) for the short term disability insurance, then it is not taxable when you receive the payments.  

 

If your employer paid the premiums, then it is taxable, just like your normal wages are taxable.  If you did not pay taxes on the premiums, then the benefits would be taxable.

 

If you paid part of your premiums and your employer paid the other part of your premiums, then you would prorate the amount that is taxable.  So, if you paid half of the premiums (with after tax dollars) and the employer paid half of the premiums, then your benefits would be 50% taxable (or prorated based on employer/employee contribution rate)

 

This is also true for your federal return. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Do I report receiving short term disability on my taxes in California? Box 14 on my w2 is "SDI C" if that matters.

Thank you for your response @Vanessa A . How can I tell if I paid or my employer did? 

MaryK4
Expert Alumni

Do I report receiving short term disability on my taxes in California? Box 14 on my w2 is "SDI C" if that matters.

Usually if it is on your W2 Box 14, that amount is the premiums that were taken from your paycheck for the state disability fund.  If you are in California, for example, usually the state system would pay you if you qualified and you would not pay tax on that at the state level but this would be taxable on the federal tax return.  Here is information on the state SDI State Disability Insurance - EDD - CA.gov. @pixiefairy88 

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