One of the most common questions we hear is questions relating to if workers’ compensation benefits are taxable in Michigan. The answer is almost always no. Weekly workers’ compensation benefits and lump-sum settlements are not considered taxable income in Michigan, which is why most injured workers do not receive a W-2 or 1099 for these payments.

However, wages earned while performing different tasks such as light-duty work, as well as certain employer provided benefits such as sick pay, short-term disability, or long-term disability benefits, may still be taxable. Workers receiving both workers’ compensation and Social Security Disability benefits should also be aware that offsets can sometimes create unexpected tax issues.

IF you need documentation showing how much you received in workers’ compensation benefits, you can request a Notice of Compensation Payments  (Form 701) from the insurance company or employer. Because every situation is different, we always recommend to speak to a tax professional or experienced workers’ compensation attorney. If you have any questions about your benefits affecting your taxes or any other government benefits, do not hesitate to give us a call.

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.