Disability income is tax exempt. Retirement Income is subject to AMT. Disability income is income that a person receives due to being unable to perform their normal job whereas retirement income is income that is received due to a person reaching a given age and having the ability to work or not work or earn income to a limited amount in order to receive retirement pay from withholding and prior services performed in their profession. Both may be subject to AMT but usually disability income is tax exempt unless conditions exist.