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Workers Comp Income

Forum|Forum|4 years ago
February 26, 2022
3 replies
31 views

Hi Guys, Thanks in advance for the help! First time having this experience (Workers Comp) - I have a client that all his income for 2021 came from workers comp. He has not received any official form/ document from that agency. Says he called asking for a form and was told he does not need one as that income is not taxable. Please help, as that does not make sense to me. I am sure it has to be reported whether taxable or not; again I am not really sure. Pls advise what form # (if any) is used to report this income so I can come back to my client and have him ask for it. Also any inside on this process will be greatly appreciated as I have never dealt with this situation. Thanks again

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Best answer by Jim-from-Ohio

workers comp benefits = not taxable

Jim-from-Ohio

Answer

Intuit Community Champion

workers comp benefits = not taxable

N

Norman2001

Level 6

From https://www.irs.gov/publications/p525#en_US_2021_publink1000229331

Workers' Compensation

Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they're paid under a workers' compensation act or a statute in the nature of a workers' compensation act. The exemption also applies to your survivors. The exemption, however, doesn't apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury.

O

OchumareAuthor

Level 4

Thanks Norman, so much appreciate it. So, we all agree income is non taxable.... Should tax payer receive a document or form stating total amount of "non taxable" benefits/amount received? What do I use to report on his tax return? Nothing? as if he never received any money? That is the part I am confused

N

Norman2001

Level 6

In Texas, no form is issued; so there is nothing to enter on the tax return. Your State might be different. You could contact them or visit their website to see if they issue a form.

O

OchumareAuthor

Level 4

So, we all agree income is non taxable....

Should tax payer receive a document or form stating total amount of "non taxable" benefits/amount received? What do I use to report on his tax return? Nothing? as if he never received any money? That is the part I am confused. Thanks in advance

J

jeffmcpa2010

Level 10

NO.

dkh

Level 15

If I'm not mistaken - Jeff just yelled.

Workers' Compensation

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