Do You Have to Pay Taxes on Workers Compensation

Workers compensation in a way is also part of income of an employee although it is not in the form of usable cash. This arises a question in which if an employee actually gets workers compensation to treat their injuries resulted in accident while working. Do you have to pay taxes on workers compensation?
Many job descriptions which are required to be completed by an employer are a dangerous thing to do. Although it is dangerous and have high potential of having accident occurred, the job still must be done in order to get business going. This is why workers compensation law is enacted to cover medical treatment expenses if something goes wrong during work. By giving workers compensation, employer is actually doing something right as requiring something potentially dangerous thing to do while if something does happen, medical expenses will be covered.

Taxable or Not Taxable?

Workers compensation can only be gotten if injuries occurred required more treatment that first aid and one follow up visit. After filing a claim of the injuries, workers compensation will be gotten from the insurance companies that provide your employer the workers compensation for the employees. The amount of workers compensation settlement can be less than appropriate compared to the injuries of the employee. However, such thing usually happens when injuries and the case is complicated. In which a professional help of an attorney or a lawyer is needed to claim more appropriate amount of workers compensation out from insurance company.
Minor injuries, unlike one with complicated cases and major injuries, are easy to get the fair workers compensation settlement. However, after acquired the workers compensation, there is further question that you have to be able to answer since it is related to the amount of your salaries. Do you have to pay taxes on workers compensation? The answer is no. 
Workers compensation falls into the same category of non-taxable income. They are payments from public welfare fund; compensatory damages for physical injury or sickness, disability benefits under a no fault car insurance policy for loss of income or earnings capacity as a result of injuries; compensation for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement.

RELATE : Average Workers Compensation Settlement

Be that as it may, there is exception case where workers compensation you get can be taxed. It is when you receive both Social Security Disability benefits and workers compensation. The Social Security benefits are taxable to a certain extent.
The case of it can become taxable is when your workers compensation reduces your Social Security disability benefits, in which that part is treated as Social Security income and is taxable. In order to keep track of the benefits from both Social Security disability benefits and workers compensation, you can calculate your payment with using the normal formula: adding half of the total of your Social Security benefits to your other income. All in all, do you have to pay taxes on workers compensation? No. But it can be taxable to some extent.

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