Will I receive a W-2 or 1099 for disability payments received through my job?

Feb 05, 2019

I was injured at home and was out of work for six weeks. During that time, I filed for, and received, disability through my job. So, it’s not Social Security disability—I actually don’t know what you would call this type of disability. I remember I elected to have taxes taken out of my disability checks. Will I receive a W-2 or a 1099 from my disability payers? I know since I had taxes taken out that I will have to file them, but I am just wondering what kind of form it will be on. I’ve already received my W-2 from work.

Based on the information you provided, it sounds like you are receiving short-term disability benefits from an employer-sponsored plan. If you had taxes withheld from the benefits, you will receive a Form W-2 from the insurance company. This is the normal process when the premiums of the plan are paid with before, or pre, tax dollars, when they were taken as a deductible expense by your employer. Another method, simply for additional information, is to not take the premiums as a deductible expense and pay the premiums with after tax dollars, meaning the premiums are not a deductible expense. This would make the benefits nontaxable. In your case, you will receive a Form W-2 and will include the benefits along with any other wages received on your tax return. If you require assistance, the PICPA has a CPA locator on its website to help you find a professional in your area.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Eric S. MacCollum, CPA, is a principal with Hudak and Company in Lemoyne, Pa.

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