All Illinois Workers' Compensation Benefits are Tax Free
Happy Labor Day!
In response to a question from a reader, please note that every benefit you receive for workers' compensation is tax free. Time off work payments, compensation for unpaid medical bills and any lump sum or long term payment does not need to be reported to Uncle Sam.
Sometimes people resign from their job and receive additional compensation for that through a work injury settlement. That additional money is likely NOT tax free.
A worker can also get burned if they settle their case on a disputed basis. Typically what will happen is the contract says "this settlement is made to purchase peace in a disputed issue." It's very rare, but possible that the Government could say that this was not a payment for a work injury.
If you aren't sure what to do you should consult with a tax lawyer or accountant.
We are workers' compensation attorneys that help people with Illinois work injuries anywhere in IL via our statewide network of attorneys. Contact us and we will answer your questions or find the right lawyer for your situation.
