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A Workers’ Compensation Attorney Can Discuss Tax Consequences for Disability Benefits

workers compensation attorneyIf you suffer an injury on the job, you may be eligible to collect workers’ compensation benefits. A workers’ compensation attorney in Phoenix can discuss how to make a claim and the tax consequences you may face in the event you collect benefits.

Understanding What Benefits May Be Available After a Workplace Injury

Workers’ compensation insurance is required by state law for Arizona employers. The system is considered “no fault.” While your workers’ compensation attorney can explain more, this generally means that regardless of who was at fault for the injury/accident, you may be eligible for benefits if your injury was job related. Like any general rule, exceptions may apply. For example, if the incident involved misconduct or did not occur within the scope of the job, eligibility may be questioned. If you are deemed eligible for benefits, you may be able to receive compensation for lost wages and medical bills that relate to the injury. Survivors may also file a claim if their spouse or parent was killed on the job.

Understanding Tax Consequences of Workers’ Compensation Benefits

Your workers’ compensation may refer you to a tax expert, but generally speaking, workers’ compensation benefits are not subject to federal income tax. As long as the benefits you receive come under the workers’ compensation statutes, you do not pay taxes on them. If you receive the benefits for workers’ compensation for a job-related injury or illness, then the tax exemption should apply. An exception or complication to this rule comes for retirement benefits. If you are receiving retirement benefits, they may be subject to taxation even if you took retirement after a workplace-related injury or illness. Your workers’ compensation attorney will likely recommend you speak with an accountant or tax expert to ensure that you take advantage of any tax exemptions that should apply when it comes to filing your returns.

An experienced workers’ compensation attorney can help you through the red tape of filing a claim for benefits. Contact the Schiffman Law Office, P.C. to set up a consultation at (602) 235-0539.

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