re: Underpayment penalty on taxes......Paging Poodle...please see last post

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If you do this for a living, I would probably go back and edit your prior post claiming that short term disability benefits are not taxable because it is incorrect information especially the 66% info you gave. The determining factor in whether or not the benefits are taxable is how the premiums were paid.

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I'll submit that I should have clarified which ones are taxable and which ones aren't. I assumed, perhaps incorrectly, that the premiums weren't paid by the employer because the OP Mentioned his wife called the insurance company, which is common for post tax electable insurance policies. But I could have been wrong.

The 66% info I gave is correct, Disability Insurance protects your income, you cannot protect 100% of gross income because you don't take home 100% of gross income.. There's a federal guideline for "ALL" Disability Insurance. You can only protect 66.6% - two thirds of your income. ie: If you make $3000 a month you can only protect $2000.

If somebody receives more than 2/3 of gross income, additional benefit above the limit paid by the short term disability policy is subject to income tax and Hefty penalties.

Any additional benefits cannot come from the disability policy, it must come from another source such as indemnity insurance, employer paid sick/annual leave.