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Larry Disparti

Will My Workers’ Comp Benefits Be Taxed?

work injury claim form

Workers’ compensation is a vital part of keeping American workers safe and healthy at their jobs. It’s a form of insurance that almost every employer has to carry in order to ensure that when someone gets hurt at work, their medical needs are covered. Under workers’ comp, if you get hurt on the job, your medical bills will be covered and you can recoup a portion of your weekly wages to help you make ends meet while you recover.

Many people are curious as to how taxes work in relation to workers’ comp. Will your benefits be taxed? In general, no, they won’t. However, certain things can reduce or offset your payments. Learn about the taxability of worker’s compensation benefits, and how a workers’ comp attorney can help you get the full award to which you’re entitled.

Workers’ Comp Benefits

If you’re hurt on the job for any reason, so long as it’s not strictly outside of your normal work duties, you’re entitled to workers’ comp benefits. If you slip and fall on the way to the bathroom, get hurt lifting a box of copy paper, or even are in a car accident en route to a client’s location, you will likely be covered.

If you get hurt due to getting assaulted on your lunch break, on the other hand, you may not be covered by worker’s comp, as fighting isn’t a normal approved part of your work duties. However, in this case, a personal injury claim could result.

Workers’ Comp, Social Security, and Taxes

In general, benefits from workers’ compensation are tax-free. They’re not reduced by tax with holdings. However, if you are receiving both workers’ comp and Social Security benefits for disability, you may end up having to pay some taxes. In most cases, workers’ comp reduces the amount of SSDI you can receive, if the combined award is greater than 80% of the average current earnings were before you got hurt.

If your SSDI benefits are offset, the amount by which SSDI is lowered is taxable. For example, let’s say you are getting $1,125 in SSDI, as well as $575 in worker’s compensation. If your average current earnings were over $2,125 per month, your SSDI is offset by worker’s comp. The amount by which it is reduced is subject to tax.

Social Security and Tax

However, Social Security isn’t always taxable. It’s only taxable if you earn more than $25,000 as a single person or $32,000 for a married couple). Otherwise, even your social security isn’t taxed.

Workers’ Comp Attorney

Issues surrounding workers’ compensation can be extremely complex. Some people are even unfairly denied claims when they first apply for benefits. When you’re facing difficulties of any kind with your compensation claim, you need qualified legal help from a Workers’ Comp attorney to be sure you get the full benefits to which you’re entitled and that you’re able to continue to make ends meet.

For years, the attorneys at Disparti Law have helped people just like you pursue the benefits and settlements they deserve. Give us a call today and let’s discuss your case.

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