When are SDI State Disability & Long Term Disability benefits included as

taxable compensation for MAGI Income – Covered CA Subsidies

Your DI benefits are taxable only if you receive DI benefits in place of UI Unemployment Insurance benefits. In this case, your DI benefits are considered a substitution for your UI benefits, which are taxable.  Federal Tax Regulation Section 1.85-1

Thus, if you can’t  work because of a disability and receive disability benefits, those benefits are not taxable.

Learn More ⇒  edd.ca.gov/

Our web pages on

Disability Income

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Free Instant Quotes - Including Subsidy Calculation

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When you get a FREE quote, you can also see the benefits, view actual brochures, MD and Hospital Lists all ONE easy process with no obligation & it can be anonymous.   Enter your zip code, date of birth, family - household taxation relationships (MAGI - Definition),    Estimated MAGI - Modified Adjusted Gross Income for the upcoming - current year.  Last years tax return only gives an idea so that Covered CA can approve your advance tax credit to help pay premiums.

If you qualify for tax credits - subsidies and want them in advance (Pros-Cons) of filing your taxes click on "Health On Exchange" - Covered CA, illustrated below.

This website and are individual consultation are provided to you FREE of Charge!  We are paid by Covered CA and/or the Insurance Companies to help you.  When you fill out the Covered CA ONLINE Application, just appoint us as your agent under Find Help in the Upper Right Hand Corner so that we get paid for helping you.  Click here for screen shots for more detail of how to do it.  If you prefer, you can pay us a consultation fee in lieu of appointing us as your agent, for educational services only.

You can then see all the quotes on the exchange, showing the Cost Share Reduction - Enhanced Silver  if available, subsidy - tax credit amount and your net premium.    If you click "Off Exchange" you will see more plans and companies which  may have larger provider lists.   Scroll down for more screen shots.

Then click on "View Plan Details" - "View Doctor's & Providers" - to compare and get more information.  Please note that the quote engine does not show enhanced silver, but shows silver at 70%.  Check our chart for the better silver coverage.   To apply, click on apply now or use the links in the right hand column, ON THIS PAGE, but it will have you redo the quote for that specific company.   The price is the SAME, no matter if you use us, go direct to Covered CA or the Insurance Company, as mandated by law!  If applying through Covered CA, be sure to sign the form to appoint us as your agent.  It's not all the easy to figure out how to do it on their website.

 If you have any questions email [email protected] or call us 310.519.1335

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2 comments on “SDI State Disability Benefits Taxable?

  1. I was told by covered California that they only count the AGI when you are self employed we have a pension and are on Social Security disability is only part of that taxable covered California considers it all taxable amount because they say they are considering the whole thing. I thought they only went by your adjusted gross income no matter whether your self employed disabled or working

    • I’m on vacation, so I can’t give you all the details and links. Please use the menu above and find the definition of MAGI income. It’s not the same as AGI line 37, there are things like Social Security that get added back in. See the menu here:


      And see what the treatment is for Social Security payments and pensions.

      If you send me a private email with all your tax documents, I can review them on the 30th when I’m back in town.

      You can also go into your Covered CA account and appoint us as your agent, no extra charge, so that we get paid to help you. Along with authoritative answers and citations to the law or actual insurance company rules.

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