The amount of workers' comp that is taxable is the same amount by which Social . to structure your workers' comp settlement in a way that minimizes the offset . The answer is no. Whether you received wage loss benefits on a weekly basis or a lump sum settlement, workers' compensation is not taxable. . Workers' compensation for an occupational sickness or injury if paid under a workers' compensation act or similar law.' Jan 29, 2017 - Recommended Answer. No, workers' compensation benefits are not taxable income. 'Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. The answer to your question is no. Workers' compensation settlements are fully tax-exempt if paid under the Workers' Compensation Act; according to Publication 907, 'Workers' Compensation for an occupational sickness or injury if paid under a Workers' Compensation act or similar law' is exempt. Learn more about claiming workers comp on your tax return from the tax experts at H&R . However, retirement plan benefits are taxable if either of these apply:. Employers cannot do business until they make workers' compensation insurance premium payments into the system, and the state agency handles the claims . If you're injured on the job, workers' comp benefits everyone. You get compensation for workplace injuries or illness without having to sue. Your employer and . Sep 27, 2018 - 'Workers' compensation for an occupational sickness or injury if paid . workplace injuries, a settlement of that case might not be taxable too. You do not pay taxes on your workers compensation settlement. . If you have a question about the taxation of your workers' comp benefits or anything else . Feb 22, 2018 - Does a settlement from a personal injury claim qualify as taxable income? . During the course a workers' compensation claim, several types of .