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do i have to pay taxes on work comp checks

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do i have to pay taxes on work comp checks
Submitted: 8 years ago.Category: Tax
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Answered in 2 hours by:
1/2/2009
Tax Professional: Ed Johnson, Tax Preparer replied 8 years ago
Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10,760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Dear hofie,

 

 

Pursuant to Internal Revenue Code Sec. 104(a)(1) and IRS Reg. Sec. 1.104-1(b) if you are receiving workmans compensation under a state program mandated by state law due to a job related injury or sickness, then the benefits are tax-free.

 

However, If your employer is continued to pay you while you are injured or sick and is requiring you to turn over the workmans compensation amount to him, then you are only taxed on the difference between your salary and the workman's compensation amount.

Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
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Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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