Suffering a work-related injury and going through the Missouri Workers Compensation process can be a long, drawn out and stressful process.
Going to doctors appointments to get yourself healthy. Keeping your bills paid while you can’t work.
And then when tax season rolls around, figuring out if your Missouri Workers Compensation benefits impact your taxes.
Workers who were injured on the job and are now collecting Missouri Workers Compensation benefits might have some tax-related questions, such as whether they are required to pay taxes on their workers’ comp or not.
The good news is that workers’ comp wages in Missouri are generally tax-free, whether it’s your final settlement or any temporary assistance you might receive beforehand. This applies for both state and federal taxes.
Under federal law, workers’ compensation benefits are typically not taxable. According to the Internal Revenue Service, if you receive workers’ compensation benefits due to a work-related injury or illness, those benefits are generally not considered taxable income.
But there are some exceptions, and it’s always best to consult with a tax professional to get a clear understanding of your specific situation.
For Missouri state taxes, workers’ compensation benefits are also generally not subject to income tax. However, there are exceptions to this rule.
If you received Missouri workers’ compensation benefits for a permanent partial disability or permanent total disability and you elected to receive a lump-sum settlement instead of ongoing payments, that lump-sum settlement may be taxable.
The portion of the settlement that represents lost wages or income is taxable, while the portion that represents medical expenses and other costs related to the injury is not taxable.
Things can get a bit murky if you’re receiving both workers’ comp and Social Security disability benefits.
If you receive workers’ compensation benefits, those benefits may be used to offset other types of benefits you receive, such as Social Security or disability benefits.
Additionally, workers’ compensation benefits may impact your eligibility for certain tax credits, such as the Earned Income Tax Credit.
Missouri law states that an injured worker’s total earnings cannot exceed 80 percent of what they were making before they suffered their workplace injury. So your Missouri Workers Compensation benefits would be carefully calculated so as to avoid coming close to that amount.
But if you are also receiving SSD benefits, that would likely push you over that 80% threshold. In order to offset that amount, a portion of your wages might be subject to taxation. Thankfully, this applies strictly to federal taxes, not the state of Missouri.
Every injured worker’s case is different. Being unsure about your tax situation regarding workers’ compensation or Social Security disability could result in some hefty fines from the state or federal government, and that’s a risk that isn’t worth taking.
It’s important to note that tax laws are subject to change, so it’s always a good idea to consult with a tax professional to ensure that you are complying with the latest regulations.
An experienced workers’ compensation attorney can also be a valuable resource in helping you navigate the complex legal issues surrounding your workers’ compensation claim.
Thankfully, there is a law office in Springfield, Missouri that has a lot of experience in both workers’ comp and Social Security disability cases. The Krebs Law Firm has years of experience and knows the ins and outs of both workers’ comp and SSD law.
We can put our expertise to work to help alleviate your stress and receive all the worker’s comp and SSD benefits you’re entitled to without the added tax burden. Reach out to us for a free consultation at (417) 883-5886 or toll free at (800) 345-0535.
The Krebs Law Firm offers free consultations. We don’t get paid unless you do. You have nothing to lose and everything to gain in giving us a call today.
Many injured workers are unaware that they can receive workers’ comp for their injuries. Others have to fight for what they are owed, such as compensation for lost wages from not being able to work or high medical bills. Call The Krebs Law Firm for a free consultation, and we will fight for your workers’ compensation rights alongside you.
Don’t try taking on the insurance companies alone. Call The Krebs Law Firm for a free consultation. You need an experienced workers compensation attorney at your side to make sure you get what you deserve for your workplace injury. Call The Krebs Law Firm locally at (417) 883-5886 or toll free at (800) 345-0535.
There is no upfront cost to hiring a Missouri Work Comp lawyer for your claim. If have a potential Missouri work comp case and want to make sure you maximize your Missouri Workers Compensation benefits for your workplace injury, then you should speak to a Missouri Workers Compensation attorney sooner rather than later.
Utilize our years of expertise to get the compensation you deserve and let us help you each step of the way.