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You will not get a 1099 for workers’ comp because workers’ compensation benefits are, in general, not taxable income in Georgia. Per IRS Publication 525, Temporary Total Disability (TTD) benefits in Georgia are not subject to income tax. Neither are Temporary Partial Disability (TPD) benefits nor Permanent Partial Disability (PPD) benefits. So, there will be no tax consequences associated with your workers’ compensation benefits or settlements.
What if I received a 1099 for my workers’ comp?
If your employer or workers’ comp insurer did issue you one, call your workers’ compensation attorney or the Georgia State Board of Workers Compensation to find out what you can do.
Do I have to report workers’ compensation on my tax return?
No, you do not need to report workers’ comp on your taxes since the payments you received from workers’ comp are fully exempt from tax. The only exception would be if you receive Social Security benefits, and they have been reduced by the amount of workers’ compensation benefits you’re being paid, per IRS Publication 525, that amount is likely taxable.
Do I have to pay taxes on workers’ comp settlements?
No, you do not have to pay taxes on a workers’ comp settlement. Both workers’ comp settlements and payments are tax-exempt. According to the IRS, “Amounts you receive as workers’ compensation for an occupational sickness or injury are fully exempt from tax if they’re paid under a workers’ compensation act or a statute in the nature of a workers’ compensation act.”
Is there an exception to tax-exempt status for workers’ comp benefits?
If you’re on Social Security, and it has been reduced by the amount of workers’ compensation benefits you’re being paid, per IRS Publication 525, that amount is likely taxable. However, for the vast majority of injured workers receiving TTD, TPD, or PPD weekly benefits, there will be no tax consequences associated with your workers’ comp benefits or settlements.
I’m a 1099 employee. Am I covered by workers’ comp?
Independent contractors and freelancers are legally self-employed and receive 1099 forms rather than W2s at the end of the tax year. Because they are not classified as employees, they are not eligible for workers’ compensation coverage, and employers are not required to purchase coverage for them. However, there are instances where employers misclassify employees as independent contractors to avoid paying payroll taxes and workers’ comp premiums. Whether or not a worker is an employee is not controlled by whether the employer calls the worker an employee or an independent contractor, but rather by the circumstances surrounding the employee’s work. If you’ve been injured at work and believe you may have been misclassified, contact us for a free consultation.
What should I do if I received a 1099 for my workers’ comp?
If your employer or workers’ comp insurer did issue you a 1099, call your workers’ compensation attorney or the Georgia State Board of Workers Compensation to find out what you should do.
So, if you’re waiting for a W2 for your workers’ comp from the insurance adjuster before you file your taxes for last year, my firm advises you to stop waiting! Go ahead and prepare your tax returns and file them.
Your workers’ comp attorney can help you understand your tax responsibilities when it comes to your compensation payments. Contact our law offices to speak to a knowledgeable Atlanta workers’ compensation lawyer at 404-354-5432.
