LTD disability taxability after six months (insurance, unemployment, wages)

[testin]

I've been receiving Long Term Disability for a number of years. The absence management company managing LTD for my former employer (the checks were my employer's checks) informed me a while back (after I'd noticed that they had stopped withholding CA state wages) that after six months have passed since the last month worked, the payments were not taxable by CA, only by the IRS.

Now, my old employer was bought out, and a new (out of state) company has been hired to manage disability claims in place of the original absence management company, and they have started taking out state tax, and have also started placing entries in boxes 13, and 14 of my W2 calling the pay "3rd party sick pay", which the old management company did not do. The new company refuses to change the W2 to match what the old company had been doing, saying that they are unaware of any need to do so.

In CA, the term "3rd-party sick-pay" is equivalent to Short Term Disability, and is mutually exclusive with sick-pay received after six calendar months have expired since the month last worked. So, a secondary concern is that calling it 3rd-party sick-pay in boxes 13 and 14 implies that I have not yet met the six month requirement.

Does the W2 change mean that they are following different rules than the old management company was following? Or just that they have different internal procedures. (the old management company was in California and the new one is on the east coast, and not as familiar with CA tax intricacies)

I don't want to have to pay taxes that I'm not supposed to, but I'm worried that the different treatment may result in my being required to.

While I do not know if the following is the original management company's basis, or not, I found articles discussing taxes on employer provided sick pay and disability pay in the CA unemployment insurance code but surprisingly none at all on the subject in the CA tax code itself. Section 933 of the unemployment code seems to indicate that sick pay made by an employer after the six month expiration is excluded from the definition of "wages" but section 939 says that exclusion applies only when the Federal Unemployment Tax Act "Sec. 3306. Definitions", part (b)(4) also excludes it, which it does, after six months.

Does anyone have any idea of what might be the actual legal basis that the first management company used to allow them to assert that the LTD benefits were not taxable by CA after six months?