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    DAVIDCR's Avatar
    DAVIDCR Posts: 1, Reputation: 1
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    #1

    Nov 21, 2009, 09:28 PM
    Tax on the Handicapped
    A relative has been receiving workers compensation from employer for four years.
    She applied and was approved for Social Security disabled benefits while receiving the workers
    Compensation payments, which had never been taxed in the past. Are both payments now taxable? If yes, how much? Who will notify her to start reporting and paying?
    Five Rings's Avatar
    Five Rings Posts: 459, Reputation: 7
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    #2

    Nov 22, 2009, 01:46 PM

    Workers comp is non taxable.

    Moreover, if the SS payments cover several years and are delivered in a lump sum payment this year you may redistribute those payments over those prior years to avoid tax.

    See:
    Publication 915 (2008), Social Security and Equivalent Railroad Retirement Benefits
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Nov 27, 2009, 10:54 AM
    DavidCR:

    You need to see a competent tax professional face-to-face to prepare the relative's return, because the computation of which Five Rings speak are NOT easily done.
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