Short term disability earnings

[daniellejones078]

I had a baby in Nov. I was on short term disability for approx. 4 weeks. I earned almost $700 during that time. Do I need to report this income on my return, and if so, will I get a separate W-2 for that?

[HelenaC]

Whether the payments are taxable depends on how and when they are paid. If all or a portion is taxable, the taxable portion will be reported on your W-2 that is issued by your employer, or reported on a Form W-2 issued by the insurer. All Form W-2's must be given to the employees by January 31.

If you and your employer share the cost of a disability plan, you are only liable for taxes on the amount received due to payments made by your employer. 

1.     If you pay the entire cost of a sickness or injury plan with after-tax money, you do not need to report any payments you receive under the plan as income.

2.     If your employer pays half the cost of premiums and does not deduct these payments from your pay, then you most likely must report half the payments received as income.

3.     Reimbursement of medical costs you’ve paid for after the plan was established are not taxable, but may reduce the amount of your medical costs deduction.

"A Form W-2 must be prepared even if all of the sick pay is nontaxable" see  http://www.irs.gov/publications/p15a/ar02.html#en_US_2014_publink1000169582.