question.jpgIn Federal Income Tax

I receive disability pay from my employer. Is it taxable?

Yes. Disability pensions are taxable wages unless they are for severe, permanent physical injuries that qualify as tax free. However, certain disability pensions received from the government are tax free, such as pensions received from military or federal government agencies, from the Veteran’s Administration, from pensions based on combat-related injuries, and disability payments received as a result of terrorist attacks or US military actions.