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Suffering an injury or illness at work can mean time off work, lost wages, or even a permanent disability leaving you unable to ever return to your job.

Fortunately, if you experience an injury at work, you may be able to receive workers’ compensation benefits to help ease some of the financial burdens.

However, if you’re receiving workers’ comp monetary benefits, you may find yourself asking: Are workers’ compensation benefits taxable? It is important to fully understand your workers’ comp benefits and what they mean for you.

For these and any other workers’ compensation benefits questions, look to Arechigo & Stokka for answers.

What Is Workers’ Compensation Insurance?

Workers’ compensation is a type of insurance that provides benefits to employees injured while on the job.

Generally, if an employer has a certain number of employees, they must carry workers’ comp insurance to protect their workers.

If you suffer an injury or illness at work that forces you to take time off of work or make you permanently disabled, workers’ comp insurance can pay you benefits to compensate you for your losses.

If you are unsure of whether you are covered by workers’ compensation insurance, or have suffered an injury at work and would like to file a claim, do not hesitate to consult with a qualified Minnesota workers’ compensation attorney.

What Kind of Workers’ Comp Benefits Are Available?

Depending on your particular situation, you may be eligible to receive workers’ compensation benefits for your injuries at work. The different types of benefits and coverage include:

  • Temporary total disability benefits;
  • Temporary partial disability benefits;
  • Permanent partial disability benefits; 
  • Permanent total disability benefits;
  • Medical treatment for the work-related illness or injury; and
  • Vocational rehabilitation services.

Additionally, if an employee dies from a work-related injury or illness, workers’ compensation insurance can provide the employee’s loved ones death benefits and burial expenses.

If you’ve suffered an injury at work and would like to better understand the benefits you may be able to receive, contact a Minnesota workers’ compensation lawyer to discuss your options.

So . . . Are Workers’ Comp Benefits Taxable?

In most cases, the short answer is no, your workers’ compensation benefits will not be taxed under federal or state law. 

While workers’ comp benefits are not taxable, you may notice a change in compensation if you are also receiving Social Security benefits.

In these situations, you may notice you’re receiving less from your Social Security payments to offset the workers’ compensation benefits you will also be receiving.

How Do Workers’ Compensation and Social Security Benefits Work?

If you are already collecting Social Security benefits and you begin to receive workers’ compensation benefits, you may experience a reduction in your Social Security benefits payments, but not always.

This reduction in Social Security payments will occur only if your combined earnings from Social Security and workers’ compensation are more than 80% of your total typical earnings.

So, for example, if your average income prior to receiving workers’ compensation was $3,000 a month, your Social Security and workers’ compensation benefits could not combine to equal more than $2,400 a month.

The main reason for the Social Security reduction is because, unlike workers’ compensation benefits, Social Security benefits are taxable. Most people experience confusion when discussing taxes and taxable income.

If you experience any doubts or uncertainties while in the process of completing your workers’ comp claim or receiving benefits, a Minnesota workers’ compensation attorney is your best resource for answers.

A Workers’ Compensation Lawyer Can Be Your Best Ally

Workers’ compensation and the claims process can present many challenges. You may experience many bumps along the way and feel unsure of how to proceed.

Working with an experienced workers’ compensation attorney can help ensure you are receiving the maximum amount of benefits. Your lawyer will review the details of your case, assist you with your claim, and do everything needed to help you get the benefits you need and deserve. 

Consult with a Minnesota Workers’ Compensation Attorney Today

Arechigo & Stokka has well over a decade of experience helping clients who were injured at work get the workers’ comp benefits they need.

We are committed to our clients and understand that every client that walks through our doors has their own story to tell.

Our firm is determined to tailor every client’s experience to suit their individual circumstances and provide them with the highest-quality legal representation.

If you’ve suffered an injury at work and wish to file a workers’ compensation claim, be sure to contact our firm.

Author Photo

Joshua R. Stokka

Josh has been representing injured workers for over 10 years. Josh was born and raised in Fargo, North Dakota, and attended the University of Minnesota-Duluth where he earned a Bachelor of Arts Degree in Criminology. Mr. Stokka alson received his law degree from the Hamline University School of Law. During law school, Josh clerked at a Minnesota law firm specializing in personal injury and workers’ compensation. Prior to practicing in the area of workers’ compensation, Josh clerked for a judge in the 7th Judicial District in Minnesota. This valuable experience gave him insight into how judges think, do their jobs behind the scene, and how to frame a case in order to obtain a favorable result.  Now, he focuses 100% of his practice on defending injured workers in Minnesota.

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