To begin, the simple answer is no. Like most things with taxes, there are a few important details to make yourself aware of.

You do not have to pay state or federal income taxes on the workers’ comp checks in Michigan because workers’ comp in Michigan was designed to replace part of your lost wages, specifically 80% of your after-tax average weekly wage. Since the weekly comp payments are based on after-tax earnings, the payments are considered tax-free.

What If I Settle for a Lump-Sum?

With many of our clients, individuals choose to take a lump-sum payment instead of continuing with weekly checks. Whether you want more control over your medical care, thinking about switching careers, or need some financial breathing room, the settlement payments are also tax-free in Michigan.

Other Taxes to Be Aware Of

Workers’ comp itself is not taxable, but other benefits you receive during the year might be. If you are receiving workers’ comp plus other types of income or benefits, it is a smart move to check in with a tax professional.

If you have any questions we’re here to help! Whether you are still recovering from an injury or thinking about settling your claim, we can walk you through your options.

Injured At Work? Contact The Law Offices Of David Zimmerman For a Free Consultation

Request a Free Case Evaluation now at 1-866-464-2889. Clients Represented in Thousands of Workers’ Compensation Claims, Trials, Settlements in Metro Detroit, Michigan, Lansing, MI, Flint, MI, Saginaw, MI, Monroe, Michigan, Michigan’s Thumb and Port Huron areas. Every day we work with our clients as we go about taking care of their crucial legal issues. The trust we develop with our clients is the foundation of our relationships. At the Law Offices of David Zimmerman, our attorneys help our clients achieve their goals by offering premium legal services. We never stop working to continuously strengthen those relationships.