Are Workers’ Comp Benefits Taxable in Georgia?

Georgia’s injured workers receiving benefits may wonder if their workers’ comp benefits are taxable. The good news is: workers’ compensation benefits are not normally considered taxable income at the state or federal level. Generally, IRS Code 104 states that amounts received under workers’ compensation acts in recompense for injuries or sickness are not considered income.  For example, an Atlanta employee suffering an occupational injury resulting in an entitlement of total disability benefits may receive, for instance, $12,000 in weekly income benefits. Her yearly W2 Wage and Tax Statement will not include that $12,000.  Additionally, should this Atlanta-based employee reach a settlement in her workers’ compensation case, the same IRS Code allows the settlement money to be tax sheltered. There is one exception to this rule, however. A portion of the workers’ compensation income may be taxable if the injured worker is also receiving benefits through Social Security disability insurance (SSDI) or Supplemental Security Income (SSI), The combined workers’ comp and social security benefits need to remain below a certain threshold. In some cases, the Social Security Administration may reduce disability insurance payments to meet this threshold. The dollar amount of that reduction is what is considered to be taxable income of the workers’ compensation benefits. This is typically a relatively insignificant amount. However, every penny counts for injured workers who are off work. At the Ramos Law Firm, we recommend you speak to your tax professional for further details about your individual tax situation.  Generally, an experienced workers’ compensation attorney can assist in structuring a settlement to maximize the non-taxable benefits. The Ramos Law Firm has been supporting Georgia’s...

Tax reporting for Workers’ Compensation income benefits and settlements

As 2013 ended, the issue of whether workers’ compensation benefits and settlement proceeds should be reported as “income” on your taxes has once again arisen.  Generally, IRS Code 104 provides that amounts received under workers’ compensation acts as compensation for injuries or sickness are not considered income.  For example, an employee who worked for an Atlanta company suffers an occupational injury resulting in an entitlement of total disability benefits.  Should she  receive approximately $12,000 in weekly income benefits, her yearly W2 Wage and Tax Statement should not include the stated $12,000.  Additionally, should this Atlanta-based employee reach a settlement in her workers’ compensation case, the same IRS Code provides the same exception. It is important to note that this tax exemption contemplates compensation for “injuries or sickness”.  It does not include compensation contemplated in contract.  For example, this tax exception does not apply to waivers of other claims or for the promise of keeping the terms of a settlement...

What is my workers’ compensation claim worth?

The answer to this question depends on a number of factors uniquely tied to each case. Generally, the claim’s “value” rests on the injured workers’ average weekly wage, the length of time the claimant has been out of work, and of course, the severity of the injury. From a legal standpoint, the issue of whether the accident was work-related is also very important.  If the accident did not happen at work, then the value of the case decreases as the Employer/Insurer will disclaim any responsibility or “controvert” liability. On the other hand, if the case is accepted under the workers’ compensation system, then the insurance company will “be on the hook” for benefits.  The benefits that the Employer/Insurer will be responsible for will be weekly income benefits (not full wages but rather the workers’ compensation rate) and medical / rehabilitation benefits.  It is important to note that there is no “pain and suffering” benefits allowed under the workers’ compensation system. The value of the case will be determined on what the Employer/Insurer may be responsible for paying in the future. If you have any questions about what your case is “worth”, please feel free to contact the Ramos Law...

What is a “workers’ compensation mediation?”

Generally, a mediation is a form of alternative dispute resolution.  The idea centers around the parties’ interest in finding a solution to the issue before the court, tribunal, or worker’s compensation board.  This process involves a neutral party to help facilitate the dialogue between the litigants. The mediation may involve the ultimate settlement of the workers’ compensation case or it may be limited to a particular issue such as medical treatment for a torn rotator cuff, surgery on a back claim, or even mileage reimbursement.   At the State Board of Workers’ Compensation, the mediation settlement conference is free of charge to the participants.  Generally, the parties will begin with an opening statement.  Subsequently, the parties will be separated into their respective “caucus.”  The mediator will then shuffle between the parties providing neutral insight to both parties as well as delivering messages.   The information exchanged at the mediation should remain confidential. At the Ramos Law Firm, we have successfully mediated hundreds of claims and reached favorable results for our...

Settling my workers’ compensation case

If you have been injured on the job and you are considering settling your claim, please note that the insurance company does not have your best interest at heart.  In fact, they have a vested interested in minimizing your settlement as much as possible. With that being said, an injured employee and the Employer/Insurer may settle the claim by agreement.  There are two types of settlement:  (1) compromise and (2) no liability. A compromise “stipulation” is the vehicle used when the Employer/Insurer has accepted liability and there is a “bona fide dispute” as to future or past benefits.  The compromise stipulation include a discussion of the medical treatment as well as the contentions of both parties.  The “no liability” stipulation is used when there has been no finding of liability and the parties agree not to pursue a claim under the Workers’ Compensation Act in exchange for money settlement.  The parties will keep a contract between them regarding the same. Both types of settlements must approved by the State Board of Workers’ Compensation.  Once the settlement has been approved, the Employer/Insurer must pay the settlement within 20 days or sooner. If you have questions about settling your workers’ compensation case, and you would like a free consultation, please feel free to contact the Ramos Law Firm at 404-355-3431 or via...