NC and Disability

[Possi]

I have a client with MS on 100% disability. She gets SSI, but my question is regarding the W2 from the insurance company. 

Her disability payments are in box 1 wages, zero FICA, zero fed or state w/holding, box 13 "3rd party sick pay."

VA does not tax this because it is complete and total disability from which she will not recover, even though it is paid on a W2.

She moved to NC and I can't find on the website whether or not this is taxable to NC. 

Help! 

Thanks! 

 

[Possi]

I don't know if this will help the next person or not, but NC does tax disability when it is reported on a W2. 

It was worth a try! 

 

[Medlin Software, Dennis]

In many cases, or most, an employer paid disability coverage is taxable. If it was employee paid, then not taxable. It is something to consider if there is a choice, remembering the employer paid bene will be considered income.