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I received a workers comp settlement of $37,000. Is this taxable income?

April 26, 2017income received taxable workers comp

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I received a workers comp settlement of $37,000. Is this taxable income?

1 Answer

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Workers compensation benefits are almost always not taxable. However, your workers compensation may be indirectly subject to tax on your tax return. The part of your workers compensation that reduces your social security benefits or equivalent railroad retirement benefits is considered social security benefits and may be taxable on your tax return under rules for those types of income.