Will I get a 1099 for my workers’ compensation benefits from last year?

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 and 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?

Since the payments received as workers’ compensation are fully exempt from tax, you do not need to include your benefits or settlement payment(s) on your tax return.

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.

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.