24 Feb

Michigan Workers Compensation Settlement – Settlement Tax Free – Yes

Michigan Workers Compensation settlements are tax free. That is because the wages you receive are based on after tax amounts. The settlements are based on your workers compensation rate which is less than your gross amount you receive per week. The only exception is if you are receiving social security disability and your social security disability is being reduced because you are receiving weekly workers comp benefits. Then under the US Code, Comp is included with the partial SSDI benefits and all of it is taxed. Please keep in mind that SSDI is taxed. This seems to be the only time Michigan Workers Compensation is taxed. It must be bundled with the SSDI that you are receiving and receiving both at the same time.