Normally taxable disability payments from a 3rd party are reported on a W-2 with box 13 check for third party sick. You must report as income any amount you receive for your disability through an accident or health insurance plan paid for by your employer: If both you and your employer have paid the premiums for the plan, only the amount you receive for your disability that's due to your employer's payments is reported as income.
You can generally exclude from income payments you receive from qualified long-term care insurance contracts as reimbursement of medical expenses received for personal injury or sickness under an accident and health insurance contract.
If you receive a W-2 for long term or short term disability, no Social Security or Medicare taxes will be withheld.
