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Taxation of Long-Term Disability Benefits. In general, if the premiums for your LTD policy were paid for with before-tax dollars (as is almost always the case with an employer-provided group plan), your LTD benefits are taxed as ordinary income to you.
Depending on your filing status and combined income, up to 85% of your Social Security benefits could be taxable. If your filing status is single, and your combined income is between $25,000 and $34,000, up to 50% of your benefits could be taxable.