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Alabama Workers' Compensation Attorney Are Workers Compensation Benefits Taxable

Alabama Workers' Compensation Attorney Are Workers Compensation Benefits Taxable

Alabama Workers' Compensation Attorney Are Workers Compensation Benefits Taxable? This is a questions we are often asked by our workers comp clients, Are my workers' compensation benefits taxable? Generally, the answer is NO.

According to the Alabama Department of Revenue (here), Alabama does not tax workers' compensation benefits. The same is true of federal taxes. So why did I say "generally?"

If you are disabled and are receiving Social Security Disability benefits and workers compensation benefits, then the total amount of monthly benefits you receive from Social Security and workers' compensation cannot exceed 80% of The Average Current Earnings you earned prior to being disabled. If the amount you receive is more than 80%, then will "set off," or lower the amount of your disability benefits to where the total amount you receive does not exceed this cut off figure.

Recently, in Sherar v. IRS, the U.S. Tax Court ruled that the set off amount of workers' compensation benefits should be treated as if it were SSDI benefits, and therefor potentially taxable. While this decision is not binding at the present, it is out there.

An experienced Alabama Workers Compensation Attorney can help structure any settlement of an Alabama Workers' Compensation claim so that the injured worker should be able to avoid most, if not all, of any potential set off and thereby maximize the amount of compensation received by the injured worker.

If you suffered a job injury and you have questions about your right to Alabama Workers' Compensation benefits, don't hesitate to contact and talk to one of the experienced Alabama Workers Compensation Attorneys at Powell and Denny today.

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Alabama Workers Compensation Attorney Are Workers Compensation Benefits Taxable

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