[christj1]

Mu social secuirty disability is 2050 a month. I bought (through my former employer) long term diability insurance with after tax dollars (no employer contribution). The total between the two is approx 5400/mo. Is this income taxable and if so to what extent?

[AtlantaTaxExpert]

Since you paid for the Prudential disability insurance out-of-pocket, that income is not taxable.

Social Security Disability is NEVER taxable.

[christj1]

Mu social secuirty disability is 2050 a month. I bought (through my former employer) long term diability insurance with after tax dollars (no employer contribution). The total between the two is approx 5400/mo. Is this income taxable and if so to what extent?

I posted this message here and continued to look for my answer. I came across a website called "Free Advice". It said that Social Security disability benefits may be taxed. If you file a federal income tax return as an individual with a combined income between $25000 and $34000 then 50% of the Social Security disability payments are subject to income tax. If your combined income exceeds $34000 then 85% of your Social Security disability benefits are taxable. It went on to say if you had third party disability benefit that you paid for (not your employer) with after tax dollars then that is not taxable. Your answer is defintiely different. WHich is true?

[KISS]

Social Security Benefits may be taxable. Look at Internal Revenue Service for rules.

[AtlantaTaxExpert]

Your Prudential disability income is totally tax-free and does not enter into the equation.

That being the case, you need only consider the Social Security disability, which, at $24,600, is below the tax threshold.

Hence, I stand by my original posting IF the Social Security disability and the non-taxable Prudential disability are your ONLY sources of income.

[christj1]

Thanks for the second response. I thought the IRS would add my Prudential disability incme with my SSDI and then determine if I was over the threshold. Thanks for the help!

[KISS]

IRS info

Are Your Social Security Benefits Taxable?

[AtlantaTaxExpert]

Glad to help!

[dandydon]

How do you know that the Prudential payments are non-taxable? Will there be a line item on the paycheck stub? All I see is a CA SUI/SDI which I different then Prudential. I assume that this is pre-tax or it would be reelected on my paycheck stub.

[AtlantaTaxExpert]

The rules on taxability of private disability compensation are rather simple:

- If the recipient paid for the disability insurance premiums out-of-pocket, the monthly disability payments are NOT subject to state or federal income taxes.

- If the recipent's disability insurance premiums were paid for by the employer, then they are considered to be deferred compensation and are therefore FULLY taxable.

In the original post, Christj clearly stated: "I bought (through my former employer) long term diability insurance with after tax dollars (no employer contribution)."

Hence, the benefit is NOT TAXABLE!

[cochrkm]

I am receiving ss long term disability and ltd through my employer which I paid for entirely. I was getting 3500 per month from my employer all non taxable. Now ss disability is paying 2150 per month so my employer reduced there payment by 2150 to 1350 per month. Problem is ss disability is going to be taxed at around 25%. I therefore loose around $537 per month to taxes. Seems wrong that I have to take a 537 pay cut from the 3500 I was getting.

[AtlantaTaxExpert]

It may appear to be wrong from your point of view, but the tax law is rather clear, and no one EVER said tax law was fair.