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January 22, 2022
Question

I have "gross wages" listed, then, "less exempt wages," listed which is giving me a taxable income. I received short term disability.. Does that mean it's not taxable?

  • January 22, 2022
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Employee
January 22, 2022

Are you working from a W-2, or something else like a pay stub? Do NOT file your taxes from a pay stub. Employers (including short-term disability insurers) have until Jan. 31 to mail their W-2s; allow mailing time (traditionally up to 2 weeks, perhaps even longer this year) to receive them. If your return doesn't match up to your W-2s, you will need to file an amended return or risk getting a notice from the IRS, potentially with penalties added.

 

Some short-term disability payments are taxable. Generally, if you paid premiums on your STD policy pre-tax (thru a Section 125 cafeteria plan like health premiums), or if your employer paid for the policy, payments from that policy are usually taxable as "third party sick pay". However, if you purchased your STD policy with after-tax payroll deductions or by paying the insurer personally, payments are usually not taxable.