Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Mar 6, 2021 8:39:38 PM

I was injured at work. My employer covered all medical/PT. They also determined that I had a partial long-term disability. I received a one-time payment. Is that taxable?

0 4 692
4 Replies
Expert Alumni
Mar 7, 2021 8:39:35 AM

How was this one-time payment reported to you - on a 1099, a W-2 or just a check?

 

New Member
Mar 7, 2021 2:47:53 PM

It was just a check. No indication on the W-2 of any payment.

Expert Alumni
Mar 7, 2021 3:04:12 PM

If you only received a check, it is likely that the payment was compensation for the physical injury you sustained, and not as paid sick leave.  Payments of this nature  are not taxable and do not get reported on your tax return.

 

Section 104(a)(2) of the Internal Revenue Code (IRC) mandates that compensation paid “on account of” personal injury or sickness is generally not taxable.  This means the federal government does not tax portions of settlements and awards that emanate from physical injuries.

New Member
Mar 7, 2021 3:18:56 PM

Thank you!