Tax Questions

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions in advance of the April 17 filing deadline. I have been on full disability for the year. The only benefit I receive is from a disability insurance policy that was provided as a benefit by my employer, at no cost to me. I have applied for Social Security but have not been approved. Is the disability benefit taxable? If so, at the full rate? Compensation received under a policy of accident and health insurance paid by an employer for permanent injury or loss of bodily function is fully includable in gross income and taxable to the employee.