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Returning Member
posted Mar 8, 2022 9:18:54 AM

Short term disability

I have received short term disability payments through my union and they have said they do not give a T4 or any other form because no tax was taken off.My question is where would I put the income on my tax return? Or do I not have to claim the income? Thanks.

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1 Replies
Level 4
Apr 4, 2022 12:03:25 PM

It depends.

"Generally, if you pay the entire amount of the disability premium yourself, your disability benefits will be tax-free. This may bring your income while on disability closer to your current take-home pay.

If your employer pays all or part of the disability premium, your disability benefits will be subject to income taxes."

Information, as per Canada Revenue Agency (CRA):
Disability insurance - Canada.ca

 

  • If your employer pays all or part of the disability premium, it is taxable.
  • If you paid for the coverage off of each paycheck with pre-tax dollars, then it would be taxable
  • If you paid for the insurance with post-tax dollars, then this would be non-taxable.
  • If a portion was paid with post-tax dollars and with pre-tax dollars and/or paid by your employer, then the percentage that was not paid with your post-tax dollars, would be taxable. (Your post-tax dollar portion would remain tax-free).

If your coverage is tax-free, then you are not required to include it on your tax return.

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