NY Short term disability??

Question

i am currently collecting short term disability. i live in ny. they are not taking out any taxes for state and federal on my weekly checks! im worried that i am going to have to pay this back when i get my taxes done next year!!!

will i have to pay back taxes?

Answer 1

Who paid for the disability?

If your employer paid for it or you did with pre-tax dollars, it's fully taxable and yes you should think about the tax consequences.

If you paid for it with AFTER-tax dollars, then it's tax free.

I don't know the rules for NY.  Ask your payroll department.  Many states try to set this up to be tax free.  (This causes confusion in California.  If you are working when you go on disability, it's tax free; if you were unemployed when you got on disability, it's taxed since it's treated as a form of unemployment compensation.)