In the U.S., most forms of income are subject to taxation, including disability benefits. However, there are some exceptions in which disability benefits can be non-taxable. Short-term disability benefits can be taxable or non-taxable depending on how the insurance plan was paid for. In general, if your employer paid for the plan, the benefits you receive will be taxed. If the plan was partially paid for by both you and your employer, you must report the disability income received as a result of your employer’s payments. If you paid for the premiums from a cafe plan and did not include them in your taxable income, it would be considered as an employer-paid plan, thus the benefits are fully taxable.

Yet, there are some exceptions when you will not be taxed. This includes benefits received from a health or accident plan that was paid entirely by you. If you are reimbursed for medical expenses due to a personal injury or illness as part of a long-term care insurance contract, this is also tax-exempt. Also, money received from life insurance contracts in the form of accelerated death benefits for terminally ill patients are usually excluded from taxable income.

State laws vary regarding disability benefit taxation. Some states do not charge income tax at all. In these states, you will not have to worry about being taxed on your disability benefits. If you live in a state where you are subject to state income tax, check with the local Department of Revenue to find out whether your disability benefits are taxable.

When needing assistance with understanding the taxation of disability benefits in California or for general questions about disability insurance, it is advisable to contact the state’s department. The easiest way to contact SDI (State Disability Insurance) in California is through the EDD (Employment Development Department) website. EDD are committed to providing Californians with informational and procedural support. If you need a more direct line of communication, consider getting information from eddcaller.com. This resource can provide you with the information you need to efficiently reach out to SDI. Ensure to consult with a tax or legal professional for personalized advice.