Are workers' compensation benefits taxable in my state?

In Washington, workers’ compensation benefits are generally not taxable. This means that the benefits you receive from workers’ compensation will generally not be taxable when you file your taxes. However, there are some exceptions that should be noted. First, if your employer has voluntarily agreed to provide you with supplemental disability benefits in addition to those provided by workers’ compensation, then these additional benefits may be taxable. Second, if you receive a lump-sum settlement from a workers’ compensation claim, then any portion of the settlement above and beyond the total of your medical expenses and past wage loss may be taxable. If you are unsure whether some of your benefits may be taxable, it is important to speak with a qualified tax professional. Additionally, the Washington Department of Labor & Industries has a website that can provide you with more information about workers’ compensation law in Washington. You can also contact the department directly for help in understanding your tax obligations when it comes to workers’ compensation benefits.

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Are workers' compensation benefits taxable in my state?

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