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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 14018
Experience:  15years with H & R Block. Divisional leader, Instructor
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How do I know how much federal income tax to take out of my

Customer Question

How do I know how much federal income tax to take out of my disability check? I don't want to end up next year owing alot of money.
Submitted: 11 months ago.
Category: Tax
Expert:  Robin D. replied 11 months ago.

Hello

First you need to determine if your disability will be taxable.

You must report as income any amount you receive for your disability through an accident or health insurance plan paid for by your employer:

  • If both you and your employer have paid the premiums for the plan, only the amount you receive for your disability that is due to your employer’s payments is reported as income.
  • If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive for your disability as income on your tax return.
  • If you pay the premiums of a health or accident insurance plan through a cafeteria plan, and you did not include the amount of the premium as taxable income to you, the premiums are considered paid by your employer, and the disability benefits are fully taxable.

If form the above you know that you payments will be taxable then you can submit a Form W-4S, Request for Federal Income Tax Withholding From Sick Pay, to the insurance company.

The withholding is similar to what you would claim for wage withholding on a W4.

The W4S has a section for calculating the amount to withhold.