Possi Posted April 5, 2022 Report Share Posted April 5, 2022 I have a client with MS on 100% disability. She gets SSI, but my question is regarding the W2 from the insurance company. Her disability payments are in box 1 wages, zero FICA, zero fed or state w/holding, box 13 "3rd party sick pay." VA does not tax this because it is complete and total disability from which she will not recover, even though it is paid on a W2. She moved to NC and I can't find on the website whether or not this is taxable to NC. Help! Thanks! Quote Link to comment Share on other sites More sharing options...
Possi Posted April 6, 2022 Author Report Share Posted April 6, 2022 I don't know if this will help the next person or not, but NC does tax disability when it is reported on a W2. It was worth a try! Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted April 7, 2022 Report Share Posted April 7, 2022 In many cases, or most, an employer paid disability coverage is taxable. If it was employee paid, then not taxable. It is something to consider if there is a choice, remembering the employer paid bene will be considered income. 3 Quote Link to comment Share on other sites More sharing options...
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