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Industrial Injury FAQ

Are Workers' Compensation Benefits Taxable?

Workers' compensation benefits are generally not taxed under state or federal law. However, if you receive workers' compensation instead of receiving Social Security disability benefits, they may be taxed.

Those who suffer industrial injury or illness, or the families of those who lose a family member to an industrial accident or disease, can pursue four different types of workers' compensation benefits:

  • Medical benefits
  • Income benefits
  • Death benefits
  • Burial benefits

These benefits are paid by workers' compensation insurance carriers, self-insured employers, or self-insured governmental entities.

Medical benefits will cover the cost of any medical treatment it takes for you to recover, such as:

  • Surgeries
  • Medications
  • General hospital visits
  • Rehabilitation

Income benefits under workers' compensation vary from state to state. Usually, a percentage of the injured workers' weekly income will be restored to them during their time off of work to compensate for lost wages. Death benefits can include bereavement and related costs and are closely tied to burial benefits which cover the cost of a funeral if the worker is killed in the work accident.

Remember, your workers' compensation benefits can only be taxed if you receive those benefits instead of Social Security benefits. Generally, you do not have to worry about your workers' compensation benefits being taxed.

If you are concerned that your benefits are being taxed unlawfully or are wondering what type of benefits you can receive after an industrial injury, we're ready to help. Contact us at (888) 493-1629 today. We offer 100% free consultations.

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  • $8 Billion Top 3 Largest Jury Verdict in U.S. History Arnold & Itkin LLP tried a Risperdal case against Johnson & Johnson for failing to warn about one of the drug’s most damaging side effects: gynecomastia. Our skill, hard work, and dedication resulted in the third-largest jury verdict ever obtained ...
  • $357 Million Largest Workplace Accident Settlement in Texas history Arnold & Itkin LLP secured a massive nine-figure settlement against a transnational corporation for a workplace incident. The settlement set a Texas record for being the largest personal injury settlement in the state’s history.
  • $205 Million Confidential Settlement Obtained for Numerous Clients Arnold & Itkin reached a record $205,000,000 settlement on behalf of clients after several years of hard-fought litigation. The case settled just before trial was set to begin.
  • $171 Million One of the Largest Confidential Settlements in History Arnold & Itkin worked over the course of several years to represent clients in a case that many other law firms turned down. In the end, we were able to obtain a record-setting confidential settlement of $171 million.
  • $117 Million Largest Single-Event Personal Injury Verdict in Louisiana History Arnold & Itkin represented a pregnant woman who experienced stomach pain and called Acadian Ambulance. The driver of the ambulance drove the ambulance into the back of a sugar cane truck causing the plaintiff's spine to be severed at T4 and for her ...
  • $116 Million Confidential Settlement Arnold & Itkin LLP negotiated a massive nine figure settlement on behalf of their clients after several years of hard fought litigation.
  • $110 Million Record Settlement Achieved for Victims of Defective Products Arnold & Itkin obtained a record settlement for individuals harmed by defective, dangerous products. The result exemplifies our commitment to clients and justice for those seriously injured by the conduct of others.
  • $105 Million Record Settlement for Dangerous Product Victims Arnold & Itkin’s legal team helped represent those harmed by dangerous products. We were successful in recovering a $105 million settlement.
  • $97 Million Massive Settlement Secured for Refinery Workers Arnold & Itkin is proud to share that after months of preparation for trial, our firm was able to secure a huge settlement for clients who were injured in a refinery fire. Find out more now.
  • $92.7 Million Record Settlement for Burn Injury Victim Arnold & Itkin LLP secured a substantial settlement for a man who suffered severe burns in an accident at his job. The settlement set a new record statewide for workers with similar injuries.
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