How much will I get paid while I am on Short Term Disability?
Anne Paulus
 The start date of your benefit and the maximum number of weeks you will receive the benefit will be determined by the Short Term Disability Policy guidelines. You will receive either a percentage of your weekly pay or a maximum dollar amount per week. Contact your Human Resources Department for the specific guidelines of your company's STD policy.
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Are My Short-Term Disability Benefits Taxable?
Jennifer Johnson
Many employers provide employer-paid disability benefits to their employees and/or allow employees to purchase disability benefits. Common questions regarding the taxability of disability benefits are outlined below.
Are disability benefits paid to an individual included in gross income?
Benefits paid under a disability policy are included in the recipient's gross income to the extent benefits are attributable to employer contributions.
Are disability benefits paid to an individual included in gross income where the individual has purchased the policy with his own funds?
No. Disability benefits are not included in the recipient's gross income if the individual purchases a policy with his or her own funds. Payments an employer withholds from an employee's check on an after tax basis are considered made from an individual's own funds. When an employer pays disability premiums from employer funds, it may add the amount of premium paid by the employer to the employee's gross income in order to provide nontaxable disability benefits to its employees.
Are disability benefits paid to an individual included in gross income where benefits are attributable to contributions made by the employer?
Yes. Disability benefits are included in gross income where benefits are attributable to contributions made by the employer. Payments which an employer withholds from an employee's check on a pre-tax basis are considered by the IRS to be employer contributions. Where an employer pays disability premiums from employer funds and does not include the cost of coverage in the employee's gross income, benefits are also considered attributable to contributions made by the employer.
Are disability benefits paid to an individual included in gross income when the cost of benefits is shared between the employee and employer?
Yes. Disability benefits paid to an individual attributable to the contributions of the employer are included in gross income. When employees and the employer both contribute to the cost of the disability policy, the three-year look back rule generally determines what portion of the benefits paid to the employee are included within gross income. |
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