It depends who it is from. SSDI is not taxable unless you have other income to add to it. None of your Social Security disability income (SSDI)
is taxable if half of your SSDI plus all your other income is less than:
- $25,000 if you filed as single, head of household, or
married filing separately, and you and your spouse lived apart all year
- $32,000 if you’re married filing jointly
- $0 if you’re married filing separately, and you and your
spouse lived together at all during the year
Up to 50% of
your SSDI is taxable if your income is more than those amounts. Also, up to 85%
of your SSDI is taxable if half of your SSDI plus all your other income is more
than:
- $34,000 if you filed as single, head of household, or
married filing separately, and you and your spouse lived apart all year
- $44,000 if you’re married filing jointly
- $0 if you’re married filing separately, and you and your
spouse lived together at all during the year
Third Party sick pay
Party Sick Pay is sometimes taxable and
sometimes not.
Third party sick pay
is an insurance disability benefit (payment) that provides benefits to
employees in place of lost wages due to absences caused by an illness or non
work related injury. These payments are made to covered employees under a plan
that is set up for participating employers. These payments typically are a
percent of the employee’s gross pay and commonly referred to as short-term
disability.
- If the employer pays the
entire insurance premium, then the sick pay payments received are 100%
taxable to the employee.
- If the employer pays a
portion of the premium and the employee pays the balance with after tax
dollars, then the sick pay payments are taxable in the same proportion as
the percentage of the premium paid by the employer.
- If the employer pays nothing
and the employee pays the entire premium with pre-tax dollars, then the
sick pay payments received are 100% taxable to the employee.
- If the employer pays nothing
and the employee pays the entire premium with after tax dollars, then the
sick pay payments received are not taxable to the employee.
Non-taxable sick pay
is not subject to taxation because the employee contributed completely to the
sick pay plan. It does not need to be reported on your income taxes (and is not
shown in boxes 1, 3, and 5 of the W-2). Your employer was required to generate
a W2 with the figure, which is why you received it. So basically you do not
need to file this return, per IRS.
"A Form W-2
must be prepared even if all of the sick pay is nontaxable (see Box 12 below).
All Forms W-2 must be given to the employees by January 31." http://www.irs.gov/publications/p15a/ar02.html#en_US_2014_publink1000169582.
J—Nontaxable sick
pay (information only, not included in boxes 1, 3, or 5
