Disability Payments & Income TaxWhen a person receives disability payments after three-months-off of work (because of surgery) do they claim these payments as income on the year-end income tax return? Does the insurance company send a statement or do you use your check slips as proof of the payments for the IRS?
Answer: In general, if you have paid your disability insurance premium with after-tax dollars, then the benefit is usually tax-free in the US. So, it depends on how you paid for your disability insurance as to whether you have to claim the payments you received. I would suspect that your employer or your insurance company would send some kind of statement for tax purposes, but I wouldn't rely on that. Contact your plan's administrator if it is through your workplace, or call your insurance company directly.