My wife was pregnant, received disability pay is it tax free?

[speedway121]

My wife is a w2 employee, received 10k in disability pay (maternity benefit from the company). It was paid out from the company she works for.  Basically she had X weeks paid at Y% post delivery. I think this was verified thru a 3rd party (UNUM) but was paid out by the company she works for.  

Is this tax free?

How do I exclude it from income, if so? (Federal)

How do I exclude it from income in CA if it is allowed to be excluded? 

[Critter]

Depends on who paid the premiums for the  Short Term Disability policy payout she got ... it is taxable income if the employer paid it ... she will get a W-2 form for it in January with the Third Party box marked in box 13. 

[speedway121]

@Critter Premium was paid by the employer. Received a W2 already and the 3rd party box was NOT checked. 

So is it fully taxable then? 

[Critter · Accepted solution]

Yes ... it is fully taxable.