Your workers comp benefits are designed to replace your income…
…but is workers comp taxable?
You already know that you have to pay taxes on most forms of income: salary, inheritance, lottery winnings, and even game show prizes. But where do your workers’ comp payments come in?
Workers’ compensation payments are designed to replace any wages you might have lost as a result of a workplace accident or illness, but these benefits are a significant reduction from your previous paycheck. Will you have to give Uncle Sam his cut and lose even more money?
In short, you want to know: “Is workers compensation taxable income?” The short answer is “no,” workers compensation benefits are not taxable. But we need to explain it to you in depth because there are some exceptions. Read more
