Is short term disability I got from California taxable?

[edspicer]

I am just wondering if I have to claim my California short term disability.  I received short term disability from the state of California because I required a procedure on my back that kept me out of work for 3 months.  It was not from a job injury and was paid out by the state.  Is that income taxable?

[CalCountry · Accepted solution]

While TurboTaxDwayneM's answer may be accurate for most cases, I have to add an important consideration to amend that answer.  I have bolded an important phrase below in the information from the California state.  There are circumstances in which your SDI is taxable.

"SDI benefits are taxable only if paid as a substitute for unemployment insurance (UI) benefits. This could occur if a person was receiving UI benefits and then became disabled. When SDI benefits are received as a substitute for UI benefits, the SDI is taxable by the federal government but is not taxable by the State of California."

[bekkamae]

If you leave work because of a disability and receive disability benefits, those benefits are not taxable. However, if you are receiving unemployment benefits, become disabled, and begin receiving disability benefits; those DI benefits are considered a substitute for UI and are taxable up to your UI maximum benefit amount.

[seanrad77]

What if you were working full time and then went out on disability (collecting SDI/disability insurance) for a surgery for a couple of weeks and then went back to work... Was not on unemployment during this time.

[bekkamae]

No need to claim.  Only if from unemployment to sdi.

[bekkamae]

If you leave work because of a disability and receive disability benefits, those benefits are not taxable. However, if you are receiving unemployment benefits, become disabled, and begin receiving disability benefits; those DI benefits are considered a substitute for UI and are taxable up to your UI maximum benefit amount.

[lopezk593]

can you receive a tax break if you were on short term disability? or can you claim you were disabled? I was off work for almost a year due to hip surgery. Can i claim that under work deductions?

[DwayneM]

No. If the disability payments is from the state (i.e. California SDI), then no. That is short term disability that is a result of an injury that prevents you from working, so that would not be taxable. Please click the link below for more information.

http://www.edd.ca.gov/Disability/About_the_Program.htm

[bekkamae]

If you leave work because of a disability and receive disability benefits, those benefits are not taxable. However, if you are receiving unemployment benefits, become disabled, and begin receiving disability benefits; those DI benefits are considered a substitute for UI and are taxable up to your UI maximum benefit amount.