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    Help Me in MI's Avatar
    Help Me in MI Posts: 2, Reputation: 1
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    #1

    Mar 25, 2009, 08:58 AM
    Fed Income Tax Not Withheld on W-2 from Insurance Co. for Short-Term Disability
    I had surgery in 2008 and received short-term disability benefits for 6 weeks. The cost of the STD insurance was fully paid by my employer. I received my W-2 from the insurance company, and they didn't withhold federal, state or city taxes - just Social Security and Medicare.

    How do I handle this on my tax returns since they didn't withhold federal and state income taxes? Is there another form I'll need to fill out? By the way, I'm in Michigan.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Mar 25, 2009, 10:13 AM

    Payments you received from a disability insurance policy that you paid the premiums for are not earned income.

    If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code "J." Then it will be reported as income.
    Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b).
    Help Me in MI's Avatar
    Help Me in MI Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Mar 25, 2009, 10:45 AM
    Quote Originally Posted by MukatA View Post
    Payments you received from a disability insurance policy that you paid the premiums for are not earned income.

    If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code "J." Then it will be reported as income.
    Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b).
    The cost of the insurance was fully paid by my employer.

    On the W-2 from my employer, box 12 is blank. On the W-2 I received from the insurance company, lines 12a-e are blank. The box for third-party sick pay is checked on line 13.
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