Question

I have a question about disability insurance taxes. Do I have to report taxes on disability insurance payments I received?

Answer

Regarding taxes on disability insurance, you can exclude disability insurance taxes on some disability insurance benefits when you report your income. One of these must apply for you to exclude the payments:

  • You bought the policy with after-tax dollars.
  • You had your employer pay the policy on an after-tax basis the year you became disabled. You must have made that election prior to the beginning of the plan year.

If your employer paid your benefits with pre-tax dollars, you must include those payments as income.

If you have taxable disability income, you might qualify for the elderly or disabled credit. To qualify, both of these apply:

  • You’re at least age 65.
  • You’re totally and permanently disabled.

Related Topics

Related Resources

Taxable And Tax Free Sources Of Income

Learn about the different sources of income and determine which ones are taxable and which are tax free from the experts at H&R Block.

Taxable Military Income

Learn more about taxable military pay and get tax answers at H&R Block.

If I paid my mom more than 400 to babysit my children, is she responsible for reporting babysitting

Learn more about reporting babysitting income on your federal taxes with help from the tax experts at H&R Block.

Is disability insurance taxable — Is short term disability taxable income?

Is disability insurance considered taxable? The answer depends on a number of factors. Learn more from the tax experts at H&R Block.