If they are not taxable for Federal purposes, then they are not taxable for California. However, I am only 95% sure. Call the CA franchise tax board before making a decision at
1-800-852-5711 early in the morning. One problem I have with the facts is you don't say if they are short-term benefit or a long-term benefit.
Let me know how it comes out.
Disability payments that are received as a result of premiums paid on the policy with after tax dollars are not taxable. An accountant can verify this.
Here is something found at the following IRS link: http://www.irs.gov/faqs/faq/0,,id=199752,00.html
"Question: I am receiving long-term disability. Is it considered taxable?
Answer: You must report as income any amount you receive for your disability through an accident or health insurance plan paid for by your employer:
1. If both you and your employer have paid the premiums for the plan, only the amount you receive for your disability that is due to your employer’s payments is reported as income.
2. If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive for your disability as income on your tax return."
As you can see you would seem to fit under #2 and a result the disability payments would not be taxable income to you.
Hope this helps. If you think this post was helpful, please check the thumbs up (helpful) tab below and/or designate my answer as best answer. Thanks.
Mr. Fromm is licensed to practice law in PA with offices in Philadelphia and Montgomery Counties. He is uuthorized to handle IRS matters throughout the United States.His phone number is 215-735-2336 or his email address is email@example.com , his website is www.sjfpc.com. and his blog is
Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received.
By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question.
Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
website is www.sjfpc.com.
These benefits should not be taxable in CA. Have a CA tax professional review your particular situation before you move to make sure.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.