Find information on key laws and resources for Texans with disabilities who qualify for tax exemptions. Disability Insurance.FICA withholding for Social Security and Medicare benefits applies to disability insurance. You can complete the W4S with your estimated adjusted gross income and any income tax withheld to date to determine if withholdings are recommended. Disability benefits may or may not be taxable depending on who made the premium payments and whether those payments are deductible. However, taxability differs if you—the employee—use pre-tax dollars to pay your portion of the premiums. If my spouse died while serving in the United States military, do I qualify for an exemption? Here at Atticus, we provide free legal advice on filling out your application and finding the right lawyer for your case. Submit a request to pay taxes on your Social Security benefit throughout the year instead of paying a large bill at tax time. Do You Deserve a Higher VA Disability Rating?