Anytime you get injured on the job, it can be stressful. If the injury holds you back from being able to perform your normal job requirements. If this is the case, there are workers’ compensation benefits to help in these cases. When you are benefiting from workers’ compensation benefits, it can raise a few questions. One of the biggest questions may be whether or not you will be responsible for paying taxes on the benefits that you receive. Mark Dicus & Company is here to talk about what tax implications you may have if you are receiving workers’ compensation benefits.
Workers Compensation Benefits are Not Taxable Income
Luckily, when you are needing workers’ compensation benefits, you don’t need to worry about them being taxable on your yearly income tax statements. Even if you are getting payments from them on a weekly or bi-weekly basis, you don’t have to worry about taxes. Some people choose to get their benefits in one lump sum as well. These benefits are fully exempt from both state and federal taxes. It is important that you remember that any earnings you made prior to those benefits kicking in or afterwards, will still be taxed, and you will receive a W-2 for that income.
Other Compensation Programs & Benefits that Can Impact Your Workers’ Compensation Benefits
While you don’t have to worry about taxes when it comes to your workers’ comp benefits, you may have other programs that could impact your eligibility. Some of these programs you may not be eligible for because of workers’ compensation funds, and others will be limited.
– Social Security Disability Insurance: You can still qualify for SSDI even if you are on workers’ compensation benefits. These benefits are in place for those that are injured or have an illness that keeps them from being able to work. You just can’t get more than 80% of the income that you were receiving before you started to get the funds. If your total exceeds that 80%, SSDI funds will be cut to keep you under that number.
– Supplemental Security Income: Anytime you are getting SSI funds, they are like workers’ compensation funds and are tax exempt. However, if you are getting help from workers’ compensation, you may not be able to qualify for this help. To receive these funds, you have to be over 65, have limited income, have a disability, and you must be a legal citizen of the US.
Bookkeepers, Accountants & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
If you are earning money from workers’ compensation or any other benefit program like it, you may have questions regarding what this will mean for your taxes next year. At Mark Dicus & Company, we can answer any questions you may have regarding your taxes and what you should be planning for in the next year. We offer tax preparation services as well as bookkeeping and accounting services. Call us today!