Worker's compensation is a federally funded program that is designed to provide injured employees with compensation for their injuries and financial losses caused by a workplace accident. Generally speaking, worker's compensation benefits are not taxable, but if an individual is also receiving Social Security Disability benefits, this might require a certain portion of your benefits to be taxable to offset the total amount of benefits you’re receiving.
What is an Offset?
If you are receiving both workers’ compensation and Social Security Disability benefits, there is a cap on the number of monthly benefits you are eligible to receive; this cap is otherwise known as an offset. The amount of combined workers’ compensation and Social Security benefits you are receiving cannot surpass 80% of your pre-injury monthly wages. If it does, the amount of Social Security Disability Benefits you are eligible to receive will likely be reduced until you are below the benefits threshold.
Most people that are receiving Social Security Disability benefits and worker's compensation do not make enough to be required to pay taxes, and for the most part, workers’ compensation benefits are exempt from taxes. However, if an individual is receiving both SSD and workers compensation benefits, a small portion of their workers’ compensation benefits that they receive might be taxable, but they won’t owe taxes to the state of Missouri.
Missouri Workers’ Compensation Benefits
If you are injured on the job, you are likely eligible to receive workers’ compensation benefits, even if you collect Social Security Disability. The amount of workers’ compensation benefits that you are eligible to receive, regardless of whether you’ll have to pay taxes on your settlement, is a weekly amount of 66 2/3% of your pre-injury weekly wages. Typically, this averages out to approximately $800 to $947/week. Under Missouri law, workers’ compensation benefits are tax-free, but if combined with Social Security Disability benefits, any portion of workers’ compensation benefits awarded for lost wages can be subjected to income taxes.
Missouri Workers’ Compensation and Social Security Benefits
While receiving both workers’ compensation and Social Security Disability benefits can result in receiving a lower amount of Social Security Disability benefits, under Missouri’s workers’ compensation laws, there might be a way around receiving a reduced amount of compensation, which can offset any effects that taxing the benefits might cause. According to the Missouri Department of Labor, this can be achieved by “adding certain language to the settlement stipulation, or by adding an addendum to the settlement stipulation containing this language. This language must be included in the settlement at the time it is approved to be effective. If you have a lawyer, your lawyer should include this language in the settlement stipulation.”
Speak with a Missouri Workers’ Compensation Lawyer Today
If you are eligible to receive workers’ compensation benefits in Missouri for an accident that happened on the job, but are unsure what requirements come along with receiving compensation, you need an experienced lawyer. A Missouri Workers Compensation Lawyer can explain why workers’ compensation benefits are sometimes taxable, assess whether you’ll have to pay taxes on your settlement, and can help you determine if there are options available for offsetting the portion of your workers’ compensation that is taxable.
Christopher Dixon and the Missouri Workers’ Compensation Lawyers at the Dixon Injury Firm are passionate about recovering the most compensation for injury victims and their surviving family members. If you or someone you love is looking for more information on whether their settlement is taxable, our experienced lawyers are ready 24/7 to help with your case. The Dixon Injury Firm’s Missouri Workers Compensation Lawyers have recovered more than $35,000,000 in settlements for victims in Missouri, and are committed to doing everything they can to ensure that you are satisfied with the results of your case.
For more information on how our Workers Compensation Lawyers in Missouri can help with your case, and determine if you’ll have to pay taxes on your settlement, call (314) 208-2808, or contact the Dixon Injury Firm today to schedule a free consultation and discuss your available options with our Missouri Workers’ Compensation Lawyers.