Tax Question

[ashlynn_j_m]

My DBF was on workmans comp for 6 weeks last year. Does anyone know if we will receive anything that we have to file for taxes?

 

[Bob Slydell]

http://www.irs.gov/publications/p907/ar02.html#d0e293

Worker's compensation is typically not taxable

 

[ashlynn_j_m]

no it wasn't taxable, i just didn't know if we received any paperwork showing what he received for wages and if we had to report it.

 

[Bob Slydell]

You should receive something -- assuming the payments were made by his employer's insurance company, who usually underwrites worker's comp, the statement will come from them.

I don't know if you need to report it. I know there's nowhere to put it on a standard 1040 Form, but I don't know offhand if there's another form you need to file to report it. Hopefully, someone with more experience with worker's comp will jump in.

 

[oxfordcircus]

I just want to raise one issue that I'm not sure about. I read Bob Slydell's link and I see what it's saying but I wonder if the IRS makes a distinction between compensation for a disabling injury vs. lost income resulting from the injury. All states are different, but some pay for the lost income and some pay a certain amount for a lost finger or toe regardless of loss of actual income. In non-WC lawsuits, compensation for lost income is taxable whereas compensation for the injury itself is non-taxable, at least that was the case a few years ago. I would satisfy myself on that point before filing.

 

[Bob Slydell]

I just want to raise one issue that I'm not sure about. I read Bob Slydell's link and I see what it's saying but I wonder if the IRS makes a distinction between compensation for a disabling injury vs. lost income resulting from the injury. All states are different, but some pay for the lost income and some pay a certain amount for a lost finger or toe regardless of loss of actual income. In non-WC lawsuits, compensation for lost income is taxable whereas compensation for the injury itself is non-taxable, at least that was the case a few years ago. I would satisfy myself on that point before filing.

Good question. I should have added my usual disclaimer that I often say this time of the year -- I'm not a tax professional.

 

[oxfordcircus]

I'm not a tax professional.

nor am i. i should also add that anyone seeking tax advice on the DIS should immediately seek psychiatric help!