Being taxed on w.comp check

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fflujan

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Hello everyone, tax time is coming and need help regarding my taxes. I'm a fireman that got hurt on the job. I've been off since june of 08. thankfully i've been getting paid like i was still there except for the overtime i get due to (FSLA). I'am also getting taxed on my check. I've been told by many that money earned on workmans comp should be tax free. Is this correct? Am I a different exception? I also know that at the time i recieve my W-2 i will be getting an additional letter from the city stating that i made so much in 2008 while on workmans comp./disability. It also states that due to their system restrictions and IRS requirements, automatic data processing is unable to list my disability pay seperately on my W-2. I was told i need to adjust my taxes according to what the city's letter states. I dont want to do anything illegal so any information is great. Thank you.
 
If you have a compensation attorney or union, check with them. Otherwise check with a tax accountant, not an H&R Block type as they most likely do not have enough experience with these issues.

First of all, if you are getting more than the comp rate, there would be a tax question as to whether or not the entirety of the money you have been receiving qualifies as tax-free compensation. I was one of three who wrote a decision that turned out to be a major case in NYS that has had national implications regarding sports contracts: an injured hockey player's awards were not considered 'pure' compensation with regards to certain reimbursement issues. So since you appear to be getting more than just the basic workers compensation award, someone familiar with the tax issues should be consulted, someone who knows the tax laws and compensation laws in your state as well as the details of your union contract. Again speak to your union. I am sure that either they have experience with this issue or they know professional who does.

Please let us at the web site know what happens. No one wants to end up like some of Obama's recent appointments who allegedly didn't know that tax laws, did not pay their fair share of taxes, and ended up with some bad press, to say the least..
 
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