If your employer paid the premium for your disability insurance coverage, deducted that premium as its own expense, and did not impute that premium to your personal payroll, then any disability benefits collected by that employee would be considered taxable income for federal income tax purposes.
Best to consult with your own tax advisor in your state of residence for that state's specific rules.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Is employer paid disability taxable? Usually the answer is yes as your employer can write off the premium paid for your benefit. They don't necessarily have to write off the premium, but usually they do for the tax reduction benefits for the business. The way most benefits work is you either pay taxes on the premium or you pay taxes on the benefit. The only exception at this time, is health insurance.
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Best to consult with your own tax advisor in your state of residence for that state's specific rules.