15 Mar Is Workers’ Compensation taxable?
Q. Is Workers’ Comp taxable?
A. Certain items of income are specifically exempt from New Jersey tax and should not be included when you file a New Jersey return.
Workers’ Compensation is one of those exempt, non-taxable items, said Cynthia Fusillo, a certified public accountant with Lassus Wherley in New Providence.
She said other items in the non-taxable category for the state include Social Security and Railroad Retirement benefits, unemployment compensation, income tax refunds, U.S. military pensions and survivor benefit payments, just to name a few.
Workers’ Compensation is generally exempt from federal taxation, she said.
“Workers’ Compensation includes amounts you receive for a job related illness or injury,” Fusillo said. “As long as the payments are made under a workers’ compensation act or statute, they will be exempt.”
This exemption also extends to survivors, Fusillo said.
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This post was first published in March 2018.NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.