Rosado, Apat & Dudley, LLP En EspaÑol Visítenos en Las Noticias
Call 800-708-8917 Today

Will workers' compensation benefits trigger tax liabilities?

Imagine you fell of a ladder and broke your leg while carrying out your job duties in New York City. The broken leg will heal, but in the meantime, you're being hit with huge medical bills and the costs of not earning an income. Fortunately, you can qualify for workers' compensation benefits to pay for your medical care and the majority of your lost wages. The question is: What does the IRS have to say about these payments?

Many workers are concerned that they will have to pay taxes on the workers' compensation benefits they receive. However, the only situations when workers' compensation benefits could be partially taxed is when the worker is also receiving Social Security Income or Social Security Disability Insurance. Otherwise, no tax liabilities will be incurred due to the receipt of work comp benefits.

The IRS classifies workers compensation benefits as "non-taxable income" in the same way it classifies the following money received as nontaxable:

  • Public welfare fund payments
  • Personal injury damages, but not punitive damages
  • Disability benefits from no-fault auto insurance payments triggered by injuries
  • Compensation for permanent disability and/or disfigurement

In addition to workers' compensation payments to injured workers being exempt, workers' compensation payments to family members of the worker are also exempt from federal tax liabilities.

Make sure that you and your loved ones fully understand the tax consequences associated with any and all injured worker benefits. This knowledge will assist you in preventing your physical, work-related injuries from turning into financial or legal problems in the future.

No Comments

Leave a comment
Comment Information
  • American Association for Justice
  • NYCOSH-New York Committee for occupational Safety & Health
  • Queens County Bar Association
  • Society of New York Workers' Compensation Bar Association, Inc | 1945
  • National Organization of social security claimants Representatives

We Can Help. Schedule A Consultation With Our Attorneys.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

New York Lawyers 800-708-8917

Long Island Office
100 Duffy Avenue
Suite 310
Hicksville, NY 11801

Toll Free: 800-708-8917
Map & Directions

Forest Hills Office
102-02 Queens Blvd.
Suite A1
Forest Hills, NY 11375

Toll Free: 800-708-8917
Map & Directions

Bronx Office
2426 Eastchester Road
Bronx, NY 10469

Toll Free: 800-708-8917
Map & Directions

Brooklyn Office
188 Montague Street
Suite 500
Brooklyn, NY 11201

Toll Free: 800-708-8917
Map & Directions