Whether your disability benefits are taxable or non-taxable is an important consideration. Generally speaking, if through your employment you have paid the premium associated with having disability benefits, the benefits will usually be non-taxable in your hands. If your employer has paid a portion of the long-term disability premium or the entire long-term disability premium then the disability benefit will likely be taxable in your hands. Whether your benefit is taxable or non-taxable has a significant impact on the income stream you can expect through your policy should you become disabled. This is why it is important to contact your employer to find out the answer to this question should you become disabled. (2)