No. Neither the IRS nor the State of Ohio treats workers’ compensation benefits as income for tax purposes.
You will have to have been injured or made sick on the job and then fight through a tough claims process; the silver lining to this process is the tax-free status of a workers’ comp claim.
Money from other disability programs, pensions, and limited work can be taxed. The following table shows the typical ways that federal and state tax collectors treat the types of payments commonly available to temporarily or permanently disabled workers.
Is My Disability Benefit Taxed?
|Private or union pension payments collected after becoming disabled
|Yes, this type of income is taxed, as is the standard Social Security benefit if it combines with other sources of income to total more than $25,000 in a calendar year.
|Social Security Disability Insurance
|SSDI is taxed as income only if the recipient’s total income rises above the threshold for paying income tax.
|Supplemental Security Income
|No, SSI is not taxed.
|Veterans Affairs disability payments
|No, cash benefits from the VA are not taxed.
|No type of workers’ comp benefit is taxed. This tax-free status applies to monthly benefits checks, lump sum payments, settlements, and payments made to the surviving spouse or dependents of someone who died in a work-related incident.
Wages and salary earned after returning to work with a partial disability and while still receiving benefits from workers’ comp or another program is fully taxable as income. Getting advice from your Cleveland workers’ comp attorney about filing taxes in ways to make clear distinctions between what gets taxed and what is exempt can help you avoid penalties and audits for misreporting income.
To speak with a workers’ compensation lawyer in Cleveland, call Agee Clymer Mitchell and Portman at (800) 678-3318. You can also reach out to us online. We offer free consultations to potential clients, and we handle all types of disability, personal injury, and wrongful death cases.