Tax consequences for receiving workers’ compensation benefits and why employers do not send Form W2.
IRS tax filing deadline is April 15, 2016. Many people are frantically getting their financial papers in order to figure out how much they owe.
We frequently get telephone calls this time of year. People want to know if they will receive a W2 from their employer.
Here are 3 tax tips that you can use when thinking about your 2015 taxes. Please remember that every situation is different and you should speak with a tax professional in your area.
Tip 1. Workers’ compensation benefits are non-taxable.
Amounts you receive for an occupational sickness or injury are fully exempt from tax if they are paid under a workers’ compensation act. This means you should not receive a W2 for these benefits.
Tip 2. Watch out for other earned income.
Don’t forget about other earned income during the year. It is also possible to have taxable income if an employer had you doing light duty for a period of time. Sometimes people on workers’ compensation fall through the cracks and a simple telephone call to your employer can prevent a big headache.
Tip 3. Don’t forget about Social Security disability benefits.
Some of our clients receive both workers’ compensation and Social Security disability benefits. This has the potential to create an offset where SSDI/SSI benefits get reduced. The part of your workers’ compensation benefits that represents SSDI/SSI might be considered taxable.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (855) 221-2667 for a free consultation today.
Workers Compensation and Social Security Disability Benefits
Photo courtesy of Creative Commons, by MoneyBlogNewz.