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-   -   Must I pay taxes on the disability backpay payment? If so, how much do I pay? (https://www.askmehelpdesk.com/showthread.php?t=576335)

  • May 14, 2011, 07:43 AM
    marthatyner
    Must I pay taxes on the disability backpay payment? If so, how much do I pay?
    I was approved for disability and was sent a large backpay disability check. Must I pay taxes on this check amount and if so how much?
  • May 14, 2011, 11:49 AM
    Indian CPA
    There isn't a simple Yes or No answer.
    If the disability payments are from a private policy that you made premium contributions to (not part of a State program or entirely funded by employer plan), than the payments are NOT taxable income.

    Refer to IRS Publication 525.

    Indian CPA
    Home - Indian CPA
  • May 14, 2011, 12:09 PM
    joypulv
    If this is US Social Security Disability, you must include that lump sum in your calculations. Whether you will owe or not depends on factors such as total income, single/married, and whether you take the lump sum election for benefits covering the previous year, which may or may not mean a lower tax. If you feel anonymous you can say all that here, but I wouldn't if this ID is your real name.

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