Disability Insurance payments may or may not be taxable, depending on various factors. The taxability of Disability Insurance payments depends on how the premiums were paid. If the premiums were paid with after-tax dollars, then the Disability Insurance payments are typically not taxable. However, if the premiums were paid with pre-tax dollars, then the Disability Insurance payments are generally taxable as income. Additionally, if the Disability Insurance policy was provided by an employer and the employer paid the premiums, the payments are usually taxable as income. It's important to note that if the Disability Insurance payments are taxable, they may be subject to federal income tax, and possibly state income tax as well. However, if the Disability Insurance payments are received as a result of a workers' compensation claim, they are typically not taxable. It's recommended to consult with a tax professional or refer to IRS guidelines for specific details regarding the tax treatment of Disability Insurance payments.