Workers' compensation received for an injury like a broken leg is generally not taxable at the federal or state level. Compensation for physical injury/sickness is generally tax-free.
Because of this, it is not usually reported in Box 3 of a Form 1099-MISC and it should not be included in your gross income on your tax return.
If this is the case, it appears your Form 1099-MISC was issued incorrectly and you should contact the issuer of the form to get a corrected one. If they confirm that this is the case, you likely will not have to report this on your tax return. But you should get a corrected form so the IRS knows it was not taxable.
If you are unable to file by April 15 because of this issue, you can request an extension to file your tax return at that time.
To apply for an extension in your TurboTax program you can do the following:
- Click on the search icon in the upper right of your TurboTax screen
- Type "extend" in your search box
- Click on the link "Jump to extend"
- Your screen will say "Applying for an Extension"
- Answer "Yes" to the question "program,"
- Select "Continue"
- Follow the TurboTax screens and answer all of the follow-up questions
Click here for How to File a Tax Extension: A Step-By-Step Guide
You can also click this link federal tax extension to start an extension for your federal income tax return.
Please return to Community if you have any additional information or questions and we would be happy to help.
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