When you receive workers’ compensation benefits, the income can indeed be a lifesaver in terms of helping you and your family pay bills and other expenses. However, when it comes to filing your taxes, you will likely have questions regarding this income. Since you may be receiving other benefits as well, such as Social Security disability, always make sure you seek expert advice prior to filing any tax returns. To learn how to approach your taxes after receiving workers’ compensation income, rely on the advice of Fond du Lac County WI workers compensation attorneys at McLario Helm Bertling & Spiegel.
Taxable or Non-Taxable Income?
At the state or federal levels, workers’ compensation income does not qualify as taxable income. Should you receive a lump sum settlement for a workers’ compensation claim, this also does not qualify at taxable income. However, when many workers fail to receive a W-2 form at year’s end, they think something may be wrong. To their surprise and relief, this is not the case.
Since it is possible to receive both workers’ compensation and Social Security disability benefits simultaneously, it is important to know your Social Security benefits do indeed qualify as taxable income. Therefore, you will be required to pay taxes on these benefits. In addition, should you be receiving both types of compensation, the Social Security Administration will probably reduce your disability benefits to make sure your earned income does not exceed 80% of your previous wages. Should you have concerns about this, speak with experienced Fond du Lac County WI workers compensation attorneys at McLario Helm Bertling & Spiegel.
Due to the many tax implications involved with workers compensation and the potential financial impacts they can have on you and your family, discuss your situation in-depth with Fond du Lac County WI workers compensation attorneys at McLario Helm Bertling & Spiegel.