There's no easy rule on whether disability benefits are taxed; taxation varies depending on the benefit you're receiving, your other income, and even your state.
Are Social Security Disability Benefits Taxed?
Social Security disability benefits (SSDI) can be subject to tax, but most people do not end up paying taxes on them because they don't have much other income.
Do You Have to Pay Taxes on Workers' Compensation Benefits?
Money you get from workers’ comp usually isn’t taxed, but there is an exception.
Are Disability Pensions and Benefits Taxable Income?
Not always, but many disability-related payments are taxable income.
Are State Short-Term Disability and Social Security Disability Benefits Taxed?
The answer depends on your state, the type of benefit, and whether you're talking about federal taxation or state taxation.
Do I Have to Pay Taxes on My Lump-Sum Backpayment of Social Security Disability Benefits?
I was approved for disability late last year, and received a large lump sum payment. Half of this money was for the tax year before last year, so makes it look like I had a high income last year.
If you're disabled, you are entitled to an array of tax credits and deductions. These may not only eliminate your income tax liability, they may also result in the IRS sending you money.
Is Unemployment Insurance Taxable Income?
Do you have to pay income tax on unemployment benefits?
Nolo's book covers Medicaid rules for seniors and persons with disabilities.
Nolo's Guide to Social Security Disability
Written by a former SSA medical consultant, Nolo's Guide to Social Security Disability is the essential book for learning about the disability process, and can be helpful whether you hire or lawyer or not.