Unless your workers' compensation payment reduces your Social Security benefits, the amount paid pursuant to a settlement or other judicial award are NOT taxable income, per IRS Publication 525. If your Social Security benefits have been reduced because of your workers' compensation benefits, only that portion of your workers' comp benefits is taxable.
In addition to settlements, TTD (temporary total disability), TPD (temporary partial disability, and PPD (permanent partial disability benefits are all workers' compensation benefits that are not taxable, subject to the exception mentioned above.
Feel free to ask additional questions to my Atlanta law office:
Moebes Law, LLC
3535 Piedmont Road NE
Building 14, Suite 410
Atlanta, GA 30305
(404)354-5432
Additionally, we recommend consulting our local Atlanta tax, bookkeeping, and accounting service provider, Fusion CPA, for further information at 404-955-7338.
