Q Do you pay tax on collected workers? compensation?
A Workers? compensation ? received for personal injuries or sickness ? is not taxable income, said Bob Davies, member of the Maryland Society of Accountants.
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“Workers? compensation is specifically exempted from tax in Internal Revenue Code Section 104(a)(1),” he said.
“However, settlements from lawsuits for ?lost income? usually are taxable,” said Phyliss Burlage, another member of the society. “And union benefits to replace wages during strikes or unemployment are also usually taxable.”
More information is available online at www.workerscompensation.com.
Taxpayer information on laws specific to the state of Maryland is available on that site as well.
