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Son got a SSA 1099 with workers comp offset that is portion of father's workers comp payments

Son has a disability, was already receiving SSI.  Father was catastrophically hurt in November 2020 and starting getting SSDI around September 2022 that included a lump sum retro payment all the way back to eligibility of May 2021.  Due to father getting SSDI, the son's SSI was reduced and he started getting SSDI as well.  I as his mother and guardian am his representative payee.  We recently received a SSA-1099 for my son that has a workers compensation offset on it.  This offset shows portion of the workers compensation funds that were paid to the father as compensation to the son and are included in box 5.  Furthermore as I said the disability payments to the father began around September 2022 with a lump sum retro payment back to May 2020.  The offset on the son's form shows as if the son received w/c funds paid in 2023 for 2021, funds paid 2023 for 2022, and then funds for 2023 paid in 2023.  I went in to SSA local office and they said this is right and for me to talk to IRS as they were the ones that had reported as such and to talk to tax officials.  When I talked to tax officials and the IRS they said that no Social Security is the one that does form and they would be ones to decide what goes on form and this in turn is what is reported to the IRS.  Tax officials and IRS both agree this shouldn't be on my son's 1099 as this is not compensation to him as is showing now,  If anyone should be having a workers compensation offset on their form, it should be my husband?  I don't think he should either as it is an insurance company from the employer paying him workers compensation benefits for his catastrophic injuries and not a government agency,  If the amount of workers comp that my husband gets is taken into consideration in how  much disability payments my son or husband gets, then that is fine but that is not compensation to my son and shouldn't be shown as compensation to him in box 3 or box 5 of the 1099.  All that I feel that show on my son's 1099 would be the SSDI compensation that SS administration has paid him.  Am I correct?

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1 Reply

Son got a SSA 1099 with workers comp offset that is portion of father's workers comp payments

All the issues as to whether the Social Security and workers comp are on the form correctly aside-----does your son have any other income at all?   If the only income he received in 2023 is the income shown on his SSA1099, he does not have to file a tax return.  Workers compensation is not taxable and does not get entered on a tax return.  And, unless your son has some other income from working, from investments, etc. then he does not even have to file a tax return and enter the SSA1099 on a tax return.

 

 

We can tell you what goes on a federal tax return----and so far it does not sound like anything your son received needs to go on a tax return.  As to how that income is being shown on the forms or whether the amounts are right----that is a discussion for you to have with Social Security.

 

Who has to file?

http://www.irs.gov/uac/Do-I-Need-to-File-a-Tax-Return%3F

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
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