Is Workers’ Compensation taxable?

[section background_repeat=”repeat” background_position=”center top” background_attachment=”static” background_scroll=”none”]


Q. Is Workers’ Comp taxable?
— Unsure

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.

Email your questions to moc.p1553051205leHye1553051205noMJN1553051205@ksA1553051205.


[divider style=”none”]

[/divider] 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.