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Non Taxable Line of Duty Injury Pay
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kvcolvin
Level 2
03-10-2026
10:01 PM
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I have a client that has been out injured pending a disability hearing. He has not gone back to work and has been out IOD for two years. His Police department has issued him a W2 with taxable wages. Is this income taxable or is there a way I can deduct it on the 1040?
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kvcolvin
Level 2
03-10-2026
10:03 PM
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As far as I am aware, line of duty injury pay is non-taxable for both fed and state (MA). But I do not see anywhere to reduce the income in the software.
ljr
Level 9
a month ago
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some departments deduct the LODI wages from box 1 already - the fed tax is usually the full amount so when you do the return the refund is higher. Some police departments do not put it on the w2 and they will give the officer their daily rate and you calculate the days by the rate and subtract it from other income as LODI. You need to have the client verify which way they calculate.
For example NYPD removes it from box 1 and you will see LODI amount in box 14
Some county/Villlage PD's don't adjust the W2
