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    passmeby's Avatar
    passmeby Posts: 473, Reputation: 11
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    #1

    Jan 6, 2008, 09:11 AM
    Workers comp award/effect on taxes?
    My husband got a workers comp settlement in 2007. How will this affect our taxes? Is it tax-free? Will they be sending anything (like a form) we will need to file with our taxes? Any info is appreciated.
    s_cianci's Avatar
    s_cianci Posts: 5,472, Reputation: 760
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    #2

    Jan 6, 2008, 10:33 AM
    I don't believe that Worker's Compensation payments are taxable. If they are, you'll receive a 1099-Form shortly which will indicate the amount that is taxable and/or reportable.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #3

    Jan 6, 2008, 11:10 AM
    Workmen's compensation is tax-free; do not worry about it.
    passmeby's Avatar
    passmeby Posts: 473, Reputation: 11
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    #4

    Jan 6, 2008, 07:54 PM
    OK, good. Thank you.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #5

    Jan 7, 2008, 04:37 AM
    Yes, it is tax free. Here is the info from IRS Publication 17: Your Individual Income Tax
    "Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. The exemption also applies to your survivors."
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #6

    Jan 7, 2008, 07:55 AM
    Glad to help!
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