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lev-tax
lev-tax, Tax Advisor
Category: Social Security
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
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I've been on social security disability sense 07/01/13. I

Customer Question

I've been on social security disability sense 07/01/13. I just got awarded a settlement from workers compensation for 12682.86 less attorney fee of 1488.85, for the period between 12/28/12 till 03/29/13. Plus personal injury of 24150.00 less attorney fee of 9495.90. Do I have to report this to SSA? Will they want my disability paid back?
Submitted: 1 year ago.
Category: Social Security
Expert:  lev-tax replied 1 year ago.

You might need to report these awards to worker compensation if you do receive such benefits qs they usually claim back if any other disability benefits are awarded .

However - no need to report to the social security administration as long as these are not wages and not self-employment income.

Expert:  lev-tax replied 1 year ago.

Please be aware that both these awards are NOT taxable.

See following publication

https://www.irs.gov/pub/irs-pdf/p525.pdf

page 19

Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act.

page 30

Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments).

.

Correspondingly - you may not deduct attorney fees because they are not related to taxable income.

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