Reminder about taxes and workers’ compensation

Call now for a free consultation
Available 24/7

Injured? It’s Time to Get Some Answers

Don’t let the insurance adjuster push you around. Request your free consultation today.

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
Get Help From our Michigan Workers’ Comp Lawyers Today
You’re not alone. Our Michigan workers’ comp lawyers have been called the best in the state, and we pride ourselves on providing you with care, trust, and responsiveness.

Tax tips for individuals who received workers’ compensation benefits in 2014.

The IRS tax filing deadline is April 15, 2015. This means it’s time to start thinking about how much money you owe Uncle Sam.

We frequently get telephone calls this time of year. People want to know if they owe taxes on their workers’ compensation settlements.

Here are 3 tax tips that you can use when thinking about your 2014 taxes. Please remember that every situation is different and you should always speak with a tax professional in your area.

1. Payments under workers’ compensation are income tax free.

Amounts paid for workers’ compensation are fully exempt from your income taxes. It does not matter if you received weekly checks or a lump sum cash payment. However, you may still owe taxes on retirement plan contributions or other benefits paid by your employer. It is best to speak with a tax professional about your individual situation.

2. Don’t forget about other earned income.

Watch out for income that was paid during the year. This includes periods of favored work. Workers’ compensation benefits are not typically included on either a W-2 or 1099 and your employer might forget to provide you with necessary tax documents. A simple telephone call to your employer could save you from slipping through the cracks.

3. Understand how a lump sum settlement might affect other benefits.

Some people receive government assistance through problems like Supplemental Security Income (SSI) and Medicaid. Entitlement to government programs could end if you receive a large cash payment. You should always consult an experienced workers’ compensation attorney before settling any claim.

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.

Related information:

Can I get workers comp benefits and Social Security Disability at the same time?

Photo courtesy of Creative Commons, by 401(K) 2013.

Leave a Reply

Your email address will not be published.

Author Bio Jeffrey Kaufman

Author
Jeffrey E. Kaufman
Michigan Workers Comp Attorney

Jeffrey E. Kaufman has extensive experience in workers compensation cases and has recovered millions of dollars in benefits for his clients. He believes all injured workers deserve to be on equal footing with insurance companies and employers, and fights tenaciously so their rights are secured and protected.


“Jeff also helped me with getting my Blue Cross bills paid. I would absolutely recommend him and the whole firm. Jeff and the firm did everything they were supposed to do for me and my case.”
Ricardo Perfetto

Hundreds of 5-Star Reviews

Related Blog Posts

Get Help From our Michigan Workers’ Comp Lawyers Today

You’re not alone. Our Michigan workers’ comp lawyers have been called the best in the state, and our clients love how they’re treated with care, respect, and responsiveness. We will give you the time you need, we will explain your legal rights, and we will always treat you with respect.

Our workers’ compensation and Social Security disability lawyers always put your needs first. Get to know your legal team.

Our attorneys post regularly about common issues related to workers’ comp, including common injuries, settlement calculations, laws, and more.

Injured? It’s Time to Get Some Answers

Don’t let the insurance adjuster push you around. Request your free consultation today.

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Our attorneys post regularly about common issues related to workers’ comp, including common injuries, settlement calculations, laws, and more.

Our workers’ compensation and Social Security disability lawyers always put your needs first. Get to know your legal team.