No, workers compensation is NOT taxable. According to page 19 of Pub 525, under the heading, "workers comp", "Amounts you receive as workers' compensation
for an occupational sickness or injury are fully
exempt from tax if they are paid under a workers'
compensation act or a statute in the nature
of a workers' compensation act." https://www.irs.gov/pub/irs-pdf/p525.pdf
