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Hi. Great Question.
It all depends on the type of disability income. Here are the rules:
Worker's comp and service-connected veteran's disability payments aren't taxable and don't need to be reported on your return.
In addition, disability benefits for loss of income or earning capability resulting from injuries under a no-fault auto insurance policy aren't taxable either.
Disability paid by an insurance company for lost wages, loss of limb, loss of sight (etc.) may or may not be taxable, depending on circumstance:
If you retired due to a disability, the pension you receive through an employer-paid plan counts as wage income until you reach the minimum retirement age (the age at which you can receive a pension if not disabled). Once you reach that minimum retirement age, the pension is no longer reported as wage income but as pension income.
If any meets the non-taxability, I would write a letter to them, along with a reference to the notice #. I would call them, first, explaining your circumstance.