Max Amount of Disability Insurance payments that are considered to be a substitute for Unemployment Insurance Compensation .

[adm]

 Disability Insurance payments are
considered to be a substitute for Unemployment Insurance Compensation.   My situation :
my maximum Employment insurance benefit  was $10 000. I got $3 000.  While receiving employment insurance I  had to go on California State disability insurance  and received 15 000.  My question : 
do I have to pay federal taxes on $15 000 or on the first $7 000  (10 000 - 3000) out of $15000 but the rest because it is over maximum employment benefit is not taxable on the Federal taxes?

[xmasbaby0]

"....... over maximum employment benefit is not taxable on the Federal taxes?"

Not quite sure what you are talking about.  For tax year 2020 ONLY, the federal tax on the first $10,200 of unemployment compensation was waived.  That was only for that specific year; now unemployment is taxable on your federal return and on some state returns.

UNEMPLOYMENT COMPENSATION

Unemployment compensation is taxable on your federal return. 

You will have to enter a 1099G that is issued by your state.

Some states will mail out the 1099G.  Or you might need to go to your state’s unemployment website and use the password, etc. that you have been using to certify for weekly benefits to get your 1099G from the state’s site.

Enter your 1099G in Federal>Wages & Income>Unemployment

Go through the screens very carefully, making sure  to enter any federal/state tax you had withheld from the unemployment.

https://ttlc.intuit.com/community/entering-importing/help/where-do-i-report-a-1099-g-for-unemploymen...

Disability Income

https://ttlc.intuit.com/questions/1901145-is-disability-income-taxable

[adm]

No, this reply is not relevant. The question is absolutely clear and the answer should be one of following :

1. The answer is $15 000 and that is the reason why ...   

OR
2. The answer is $7 000 and that is the reason why...

[taxlady28]

$18,000 because all of what you received it taxable

[adm]

Sure. $3000 is taxable no matter what, I agree. What I don't find confirmation for is that the full amount of my disability benefit should be taxable. Usually federal tax related to benefit is up to the max benefit amount it replaces (in this case max employment insurance benefit available - in my case it was $10 000). However i could not find any definitive IRS document one way or the other for this particular situation.  That what I was looking for.Section 1.85-1(b) (ii)  is very vague in that regard

[Mike9241]

@adm According to the state of California's Employment Development Department, if you live in California and receive State Disability Insurance (SDI) payments the disability payments are not taxable but there are some exceptions. It all depends on whether or not you are receiving unemployment benefits.
Per the California EDD, individuals who leave work due to a disability and receive disability payments do not have to report these for tax purposes. the important exception is if you are getting unemployment benefits and become injured or ill and start receiving disability benefits, those benefits now serve as a replacement for unemployment payments and per Federal Tax Regulation Section 1.85-1.  Thus these payments are taxable