Have a Tax Question? Ask a Tax Expert
If the disability plan that you have through your employer is a fringe benefit where your employer pays the premiums for the disability insurance, then any disability payments you receive are taxable as regular income. Typically, most disability payments will only withhold social security taxes, so you should probably set aside money to cover federal and state taxes that you will owe at the end of the year. There are no tax benefits available to you at this point for being on disability through your work. Sorry.