I received long-term disability insurance payments. How do enter that income section?

[light4]

My employer paid my premiums; I was taxed on my payments, FICA/FIT. I didn't receive a W-2 because I didn't work, I was on disability.

[MarilynG1]

Click this link for steps to report Taxable Disability Pay in TurboTax.

[light4]

@MarilynG1 I appreciate your help. You directed me to the right place! 

[ARC371]

Hi @MarilynG1!

I'm hoping you, or someone else, can answer this question.  My LTD company stopped withholding FICA taxes on my payments and I don't want to end up with a big tax bill when I file my 2023 taxes.  My question is: could I, or should I, increase the Federal withholding (which I've opted to have withheld for the same reason, by filling out a W4-S) to make up for the FICA taxes not being withheld anymore?

[DaveF1006]

Increasing your federal tax withholding will not make up for the FICA taxes that are not being withheld. These are two different type of taxes. The FICA taxes are withheld and deposited to your Social Security account for a promise of a future repayment or benefit to be issued by you.

Federal/state withholding taxes are paid to the US Treasury Dept/State Dept of Revenue to fund our government activities to make life enjoyable for all its citizens.

[ARC371]

Okay, thanks @DaveF1006!

But does this mean I will owe FICA taxes when I file my 2023 tax return?  This will be a significant amount ($410 per month was being withheld from my checks for Medicare and SS combined).

[DaveF1006]

No.  Disability payments are only subject to FICA taxes for six calendar months. Starting the 7th month, FICA taxes on disability payments are exempt.

{Edited 04/13/23} (4;44 PM PST} @ARC371 

[ARC371]

@DaveF1006 I've only been on disability since last October...  So will I owe FICA taxes then?

[MonikaK1]

FICA taxes apply to the full amount of the disability payment for the first six calendar months (rather than years) after the employee has ceased performing services for the employer. Disability payments will be exempt from FICA starting in the seventh calendar month after the employee has stopped performing services for the employer. 

Many disability insurance companies have this information on their websites (see here, for example). You might check with yours for more information.

[ARC371]

Thank you so much, @MonikaK1!

I was definitely confused when @DaveF1006 said six years (not months).