Are Work Comp Payments Taxable Income?

The short answer is, “99% of the time, No.” However, there are some very unique situations that make work comp payments reportable on your income tax returns.

The most common situation is when an injured worker is receiving both Permanent Total Disability benefits and Social Security Disability Indemnity benefits (not to be confused with regular Social Security Retirement benefits).

However, any payments for temporary total disability, temporary partial disability, permanent partial disability, settlement lump sums, medical benefits, or vocational rehabilitation are not taxable income.

Consult with a tax professional, or Frayne Injury Law, to confirm your particular situation shouldn’t be considered taxable income.

Frayne Injury Law is a law firm that represents injured employees in work comp cases. A free, no obligation, consultation is available to anyone looking for legal advice.