If you have received workers’ compensation due to a workplace injury, the question of taxes may come up sooner or later. You may wonder if those benefits are taxable. If you are receiving a wage differential or disability benefits, will you have to report those on your return?
The simple answer is these benefits are not taxable. You can receive benefits through workers’ compensation without fear of it impacting your taxes—at least in most scenarios. There is one exception to this rule, and it involves Social Security.
Workers’ Compensation and Social Security