Do I need to report Short Term Disability and Bereavement leave on my taxes for 2025?

So I ended up having to take short term disability last year due to a pretty bad car accident, and my employer paid me for about 60% of my regular salary during that time. All of this showed up on my regular paystubs and I noticed they withheld taxes from these payments just like my normal paycheck. I also unfortunately had to take bereavement leave after my uncle passed away unexpectedly. The company gave me 5 days of paid leave, and again, this all showed up on my regular paystub with taxes taken out like normal. I'm working on my taxes now and I'm confused if I need to report these payments separately somehow? Since they were both handled through my employer's payroll and taxes were already taken out, do I need to do anything special when filing my return? Or is it all just considered regular income since it's already on my W-2? This is my first time dealing with either situation on my taxes and I'm not sure if I'm missing something important.

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19 comments

Oliver Fischer

•8M

The good news is that you probably don't need to do anything special with these payments on your tax return. Since both your short term disability and bereavement leave payments were processed through your employer's payroll system and had taxes withheld, they're already included in your W-2 income. When you receive your W-2 from your employer, Box 1 will show your total taxable wages for the year, which would include these payments. The form doesn't break out regular wages from disability or bereavement pay - it's all lumped together as taxable compensation. The only exception would be if you received disability payments from a third-party provider or insurance company instead of directly from your employer. In that case, you might receive a separate 1099 form that would need to be reported.

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Oliver Fischer

•8M

That's a great question about paying into the plan with after-tax dollars. If you paid the premiums for your short-term disability insurance using after-tax dollars (meaning the premiums weren't excluded from your taxable income), then the benefits you receive could actually be tax-free. In that situation, your employer should not have included these payments in your taxable wages on your W-2. If they did include them and withheld taxes, you might be entitled to a refund for the taxes paid on those benefits. You'd need to check with your employer's HR or benefits department to confirm whether you paid for the disability insurance with pre-tax or after-tax dollars.

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Javier Morales

•8M

After struggling with a similar situation last year, I found this amazing tool at https://taxr.ai that analyzes your pay stubs and W-2s to figure out if your disability payments were properly taxed. I was completely confused about how my maternity leave (short term disability) should be handled until I uploaded my documents there. The system flagged that my employer had incorrectly included disability payments that should have been tax-free since I had paid the premiums with after-tax dollars. They provide a really detailed breakdown that shows exactly what portion of your disability benefits should be taxable vs non-taxable based on how your plan is funded. The reports they generate were super helpful when I had to go back to my HR department to get things corrected.

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Javier Morales

•8M

The tool analyzes all types of leave payments on your paystubs, including bereavement. While bereavement pay is generally taxable as regular wages regardless of how it's funded (since it's not an insurance benefit), the system will flag if it was categorized incorrectly on your W-2 or if there were unusual withholding patterns. They don't directly interact with your employer, but they provide detailed documentation explaining the tax treatment that you can share with your HR or payroll department. I found that having the specific tax codes and regulations cited in their report made my HR department take the issue more seriously. They also have templates for requesting corrections from employers that worked great for me.

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GalaxyGlider

•8M

Just wanted to follow up - I decided to try the https://taxr.ai service after seeing it mentioned here and I'm so glad I did! Turns out I had been paying for my disability insurance with after-tax dollars for 3 years but my employer was still treating the benefits as fully taxable. The report clearly showed which portion should have been tax-free and included the specific IRS publications that explained the rules. I was able to get my W-2 corrected for this year and file for refunds for the previous two years using their amendment guidance. Ended up getting back almost $1,800 in taxes I shouldn't have paid! The system even flagged that my bereavement leave was correctly handled (it's always taxable) so I didn't waste time questioning that part. Definitely worth checking out if you've received any type of special pay.

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Malik Robinson

•8M

If you're having trouble getting answers about your disability payments or correcting tax issues, I highly recommend using Claimyr (https://claimyr.com) to actually speak with an IRS agent directly. I spent WEEKS trying to figure out if I could amend previous years' returns due to improperly taxed disability payments, but kept getting stuck in the IRS phone tree or disconnected. I was super skeptical at first, but their service actually got me connected to a real IRS representative in about 15 minutes when I had been trying for days on my own. The agent walked me through exactly how to document and claim a refund for incorrectly taxed disability benefits. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c It's especially helpful if you discover your disability was incorrectly taxed in previous years and need specific guidance on the amendment process directly from the IRS.

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Malik Robinson

•8M

They use a combination of technology and timing to navigate the IRS phone system when call volumes are most likely to get through. They don't call the IRS for you - they secure your place in line and then call you when they've reached an agent, at which point they connect you directly to the IRS. The call is between you and the IRS agent, they just handle the waiting and navigating the phone tree part. The reason it works is because they've optimized exactly when and how to call based on IRS staffing patterns and call volume data. It's especially useful for complex tax questions like disability payment taxation where you really need to speak to a specialist rather than just reading generic advice online that might not apply to your specific situation.

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Ravi Choudhury

•8M

I need to apologize for my skeptical comment earlier. After my third attempt to reach the IRS about my disability payment tax issue ended with a 3-hour wait and then a disconnection, I decided to try Claimyr out of frustration. I honestly expected it to be a waste of money, but I was connected to an actual IRS tax specialist in about 20 minutes. The agent explained that because I had paid for my disability insurance with a combination of pre-tax and after-tax dollars (split 70/30), I needed to report 70% of the benefits as taxable income. They walked me through exactly how to document this on my return and what supporting documentation I should keep. This was after my own HR department gave me completely wrong information! I was genuinely surprised at how well it worked - definitely not the scam I thought it might be. Saved me days of frustration and potentially filing incorrectly.

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Freya Andersen

•8M

One thing that hasn't been mentioned yet - if your short term disability was paid by a third-party insurer (even if it's through your employer's plan), you should have received a Form 1099-G, not just have it included on your W-2. My company uses Sedgwick for disability claims and it's always reported separately from my regular wages. You might want to double check with your HR department about how your specific plan works. Some companies self-fund their STD plans (then it's on your W-2) while others use insurance (which results in a separate 1099).

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Freya Andersen

•8M

Bereavement leave is almost always handled as regular wages since it's a company benefit rather than an insurance payment. I've never seen it reported separately in my 15 years working in various companies. As for your disability situation, that makes perfect sense. Since you were within the company's self-insured period, it would just show up as regular wages on your W-2. If you had gone beyond 8 weeks and started receiving payments from the third-party provider, then you likely would have received a separate tax form for that portion. The tax treatment might also have been different depending on who paid the premiums for that extended coverage.

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Amara Adebayo

•3M

You'll need to gather your pay stubs from throughout the year to show the STD premium deductions. Look for a line item that shows the disability insurance premium being deducted from your gross pay but NOT being excluded from your taxable wages (meaning it was taken with after-tax dollars). You can also request a benefits statement from HR that shows how your premiums were handled tax-wise. When I filed my amended return, I included copies of several pay stubs highlighting the premium deductions and a letter from HR confirming the premiums were paid with after-tax dollars. The IRS accepted this documentation and processed my refund in about 8 weeks. If you're having trouble getting clear answers from HR, you might also check your annual benefits enrollment materials - they sometimes specify whether premiums are pre-tax or after-tax.

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