Do i have to report my workers compensation settlement?

erevaz · ‎June 4, 2019

I was injured at worked and had surgery, but the surgery was unsuccessful and was left in more pain. Later on I filed a claim and received $15,000 as a settlement. I was wondering if I have to report the amount I got as earned income? I also hired a lawyer and paid his $2,000 in fees.

bwa · ‎June 4, 2019

As Workman's compensation is designed to provide for injuries and medical benefits when you are injured on the job, the payments are not taxable income and not reported on your tax return, although there are some exceptions. If the award is not taxable income, then the attorney fees paid to receive it are not deductible. If the award is taxable income, the legal fees would be deductible.

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bwa · ‎June 4, 2019

As Workman's compensation is designed to provide for injuries and medical benefits when you are injured on the job, the payments are not taxable income and not reported on your tax return, although there are some exceptions. If the award is not taxable income, then the attorney fees paid to receive it are not deductible. If the award is taxable income, the legal fees would be deductible.