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I received short term disability for part of the year

 
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1 Reply
LinaJ2018
Intuit Alumni

I received short term disability for part of the year

The way you enter the short term disability benefit depends on whether it is taxable as regular income, and how the insurance premiums are paid.

It is taxable  when your employer paid your premiums partially or fully or if you paid the coverage with pretax dollars. Your employer will report it as part of your wages in box 1. As you enter your Form W-2 as the replica in the TurboTax program, the program will include in your wages on line 7 of your Form 1040 as a taxable transaction.  

It is not taxable  if the payments come from a third party like an insurer, and you pay for the policy with after-tax dollars -- even if it's purchased through a health plan.  Nontaxable disability payments will be reported in Box 12 of the Form W-2, using Code J.

 

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