Legal Question in Tax Law in Texas

who is responsible for paying taxes when on workmans comp

I have been on workmans comp for over 2 monthes and will be off work for about another 2 monthes. I am getting paid 70% of my wages. When tax time rolls around, am I responsible to pay taxes on these wages. They are not taking any taxes out right now.


Asked on 12/16/01, 11:24 am

1 Answer from Attorneys
Scott R. Seideman The Seideman Law Firm, PC

Re: who is responsible for paying taxes when on workmans comp

The income you receive in the form of workers' compensation is most likely exempt from federal income tax. According to U.S. Tax Code Sec. 104(a)(1) and Treasury Regulation Sec. 1.104-1, compensation received under a workers' compensation act for personal injuries or sickness and amounts received by a taxpayer under a policy of accident and health insurance are exempt from tax.

Reg. Sec. 1.104-1(b) also provides that benefits payable under state law for an occupational injury or illness arising out of employment are nontaxable if the benefits are in the the nature of workers' compensation payments.

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Answered on 12/16/01, 1:29 pm


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