Are Massachusetts Workers Compensation Benefits Taxable?

This is a common question we receive from our clients that have been hurt on the job.  Understandably, they are concerned with many issues, especially whether they will owe any taxes on workers comp benefits they collect while they are out of work.  Unlike with motor vehicle accidents and other personal injury cases, there are no federal or Massachusetts taxes on workers compensation benefits.

Are Massachusetts workers compensation benefits taxable?

Federal Taxes and Workers Compensation Benefits

The federal government does not impose taxes on workers compensation benefits.  This is found at IRS Publication 17 that states that workers compensation benefits are not taxable.  According to the IRS, “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 IRS also has Publication 907 that confirms “Workers’ compensation for an occupational sickness or injury if paid under a workers’ compensation act or similar law.”

Massachusetts and Workers Compensation Benefits

Massachusetts weekly benefit checks as well as lump sum settlements are not taxable.

Boston Workers Compensation Attorney

Contact us today if you need a workers compensation attorney in Massachusetts to help you with your work injury case.  We don’t collect a fee unless we win your case.