1. Peggy MacePRO
    President and Senior Agent, Outlook Life, Most of the U.S.
    Whether your employer provided disability insurance is taxable depends on who pays the premium, among some other things. If you pay the premiums for your policy with earnings that have already been taxed, your disability benefits should be tax free if/when collected. If your employer pays the policy premium and does not count that as income to you, then the disability benefits would be taxable.

    Whether you split premiums, use a cafeteria plan, or other factors, taxation has its own rules for each situation. But the above is the most common rule of thumb for employer provided disability insurance taxation.
    Answered on September 11, 2013
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