Tax law is merciless. Rules are rules. You have to get the rules right, or you lose the benefits.

Millard Thomas got hurt on the job and qualified for total disability from his labor union. Properly structured, disability payments for an injury are not taxable.

Unfortunately, the union based the payments to Thomas on his age and years of service rather than on his disability. Tax law is very specific here:

Had the payments been based on the injury, the disability income would ... Log in to view full article.