How do Taxes Relate to My Worker’s Compensation?
Taxes & Workers’ Compensation, generally, workers’ compensation benefits are taxable. However, there are retirement plan benefits that are taxable if you retire due to your occupational sickness or injury, or if your workers’ comp benefits reduce your SSI or railroad retirement benefits. While these things may seem complicated, it is best that you consult with an Oklahoma City workers compensation lawyer affiliated with the Burton Law Group.
Workers’ Compensation Taxes Explained
Workers’ comp benefits are not counted as taxable income at either the federal or state levels. This also includes lump sum payments that are made to cover losses due to injuries. Furthermore, you have no obligation to include these benefits in your tax returns. Additionally, you will not receive any tax documents on these benefits.
Just because workers’ comp benefits are not taxable, doesn’t mean you cannot face tax issues. This is why it is wise to consult with a worker’s comp injury attorney. When these payments are not accompanied by other benefits, issues can arise when it comes to your taxes. Workers comp injury attorneys are experienced and knowledgeable and will be more than happy to guide you in the right direction. Issues can arise. For example, you may receive a tax notification on your income if you have been collecting workers’ comp benefits and SSI benefits at the same time.
Workers’ Comp & SSI Benefits
Did you know that you may be eligible to collect both SSI benefits and workers’ comp payments at the same time? When this occurs, your workers’ compensation benefit may reduce your SSI benefit. This process is known as offsetting and is done to make sure that you do not collect more than 80 percent of your previous income. Oklahoma workers compensation lawyers can explain more.
Since social security disability qualifies as taxable income, this could create an exemption to your tax-exempt status. Typically, the Social Security Administration will only use your average benefits, with workers’ comp included, to calculate an offset that is acceptable.
Again, a Tulsa workers comp attorney can help you understand what obligations you have regarding your taxes this type of situation. An attorney will also be able to help you minimize taxation by structuring your payments.
How an Attorney Can Help
Workers’ compensation benefits are designed to protect employees that have been injured or fallen ill while on the job. These benefits are meant to assist you in getting back to work as soon as you can. However, things can become complicated, especially if you are suffering from severe or even permanent injuries. For example, your employer may even try to deny your claim, or you may not receive the benefits you deserve.
This is when a worker’s comp attorney is needed. A workers’ comp lawyer can help develop medical evidence to help prove your claim, represent you at your hearings, and even negotiate a settlement on your behalf.
When you hire a dedicated attorney, you will have a greater chance of receiving the benefits that you deserve. Additionally, if you are collecting both SSI benefits and workers comp benefits, Tulsa workers comp attorneys can help explain what to do for tax filing purposes.
Did you know that an attorney could also help develop all the medical evidence needed to prove your case? They can do this by:
- Collecting medical records
- Recommending or arranging treatment with certain doctors
- Getting various medical opinions from the doctors treating you and via an independent medical exam
- Represent you if you need to appear and answer questions at a deposition
- Conduct depositions of medical experts
Additionally, a workers’ comp attorney will also be able to negotiate settlement agreements with the employer’s insurance company. An attorney has the advantage of being able to estimate the amount your case is worth based on various things such as the extent of your injuries, your medical expenses, and much more. Consultations are free and we’re here to help!