Will the workers’ compensation insurer send me a 1099 or W-2?

You will not receive a W2 for workers’ comp because workers’ compensation benefits are not taxable income for the vast majority of injured workers. That means that the workers’ compensation insurer will not send you tax forms accounting for any weekly TTD (temporary total disability) checks or settlement funds from the previous year. Because workers’ compensation benefits will not affect your tax return, you will not receive any tax documents about your workers’ comp benefits and it is not necessary to include your workers’ comp as income when you file your taxes.

Do I have to report workers’ comp on my taxes?

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.”

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 to stop waiting!  Go ahead and prepare your tax returns and file them.

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