How Does Workers’ Compensation Benefits Work with Taxes in Massachusetts?

If you are injured on the job, you may be eligible to receive workers’ compensation benefits. These types of benefits enable injured individuals to receive medical care and wage assistance if they are unable to work due to their injuries. Fortunately, workers’ compensation benefits are not considered as taxable income in the State of Massachusetts.

Workers’ compensation benefits are not taxable, and an injured worker should work with an experienced workers’ compensation lawyer to ensure that they are receiving their full benefits. Injured individuals should speak to a skilled Boston personal injury attorney to learn more about the correlation between Boston workers’ compensation and taxes.

What Defines a Person’s Average Weekly Wage?

A weekly wage is an average of what the injured worker earned working at the job where they were injured usually during the prior 52 weeks. All earnings that the injured worker received are included, such as his or her regular hourly rate, any shift differentials, overtime, bonuses, or commissions that they received. Also, if an injured worker had a second job, that should be included as well in calculating the average weekly wage. When the injured worker has a second job, the second job is referred to as concurrent employment. The concurrent wages that the injured worker had from job A and job B are all added together.

The average weekly wage is calculated based on the injured worker’s gross or pre-taxed wages, not his or her net wages. If he or she was making $600 or $1000 a week, the average weekly wage is calculated based on those pre-taxed earnings that they received for each week, not the net that they received after taxes were deducted.

The Relationship Between Benefits and Taxes in Boston

Workers’ compensation benefits are non-taxable similar to personal injury settlements. The fact that an injured worker is receiving only a percentage of their pre-injury wages is a reflection by the state legislature when they enacted the workers’ compensation statute. The benefits received are to reflect the net benefits and approximation of the net benefits that an injured worker would have received when he or she was working.

For temporary incapacity benefits, the injured worker receives 60 percent for partial benefits. They receive 60 percent of the difference of his or her pre-accident average weekly wage in his or her earning capacity not to exceed a maximum of 75 percent of his or her temporary incapacity benefits. For permanent total incapacity benefits, he or she receives two-thirds which is roughly 67 percent of his or her average weekly wage.

These percentages and fractions of the injured workers’ average weekly wage are the injured workers’ net benefits. The bottom line to the injured worker is that his or her weekly benefits in the settlement that he or she receives are non-taxable and not even reportable to the Massachusetts Department of Revenue or the Internal Revenue Service. There are no circumstances in which a person’s workers’ compensation benefits will not be considered tax-free. Workers’ compensation benefits are not taxable at least under the current IRS code. To learn more about Boston workers’ compensation and taxes, claimants should speak to a diligent Somerville personal injury attorney.

Determining Eligibility for Benefits

A knowledgeable Wakefield workers’ compensation attorney could help if an insurance company has denied or terminated an injured workers’ benefits by claiming that that the injured person was not an employee but rather an independent contractor. Under the Massachusetts workers’ compensation system and case law, the administrative judge is in charge of deciding whether or not the injured worker is entitled to workers’ compensation benefits. If there is a dispute, the judge looks to the actual work arrangement between the injured worker and the alleged employer and not simply job titles or tax arrangements or schemes that the employer utilized to try and work around the workers’ compensation system.

The administrative judge is going to look at things such as the working conditions of the employee, hours, location, and means and method of work. The judge will consider whether or not the injured worker is an employee or an independent contractor by looking at all the facts surrounding that employer relationship. The judge is trying to cut through the different defenses that an unscrupulous employer might try and raise to say that the injured worker was an independent contractor and not entitled to workers’ compensation benefits.

Call to Learn More About Workers’ Compensation and Taxes in Boston

Getting hurt on the job could have many unforeseen consequences. Under the law, eligible individuals may be able to claim workers’ compensation benefits. If your benefits are terminated or reduced by an insurance company, an experienced Malden workers’ compensation lawyer will do what is necessary to file the appropriate claim to either reinstate the benefits or to recover full benefits if the insurance company had reduced them.

Call today to learn how a seasoned Massachusetts personal injury attorney could help with understanding the nuances of Boston workers’ compensation and taxes.

Real Stories From
Our Clients

Attorney Sheehan has been serving the needs of Boston-area residents since 1993. Our mission is to ensure complete client satisfaction and to obtain the maximum possible settlement or verdict for our clients.

Historias Reales de Nuestros Clientes

El abogado Sheehan ha atendido las necesidades de los residentes del área de Boston desde el 1993. Nuestra misión es garantizar la satisfacción de nuestros clientes y obtener el mejor acuerdo posible en sus casos.

"John Sheehan is a highly knoweldgable and all around amazing lawyer!" Si volvemos a necesitar un abogado para algo en el futuro, USTED será a quien llamemos.

I was injured at work in 2019 and John and his team made the process as simple as anyone could!! They took care of everything! The only thing I had to do is rest and go to doctor appointments! I would HIGHLY recommend anyone looking for an attorney to hire John Sheehan - if you would like a nice and easy process in a highly stressful situation and on top of it attorney Sheehan will get you the maximum of what your case is worth!

John Sheehan y su personal son muy amables, corteses, rápidos y explican todo a fondo. Hicieron un trabajo maravilloso para mi esposo y para mí y no podría recomendar un abogado más calificado. Hizo TODO lo que pudo por mi esposo y por mí a través de la compensación de trabajadores. He recomendado y continuaré recomendando a John a cualquiera de mis amistades que necesiten sus destrezas. Trabajo asombroso. John, Muchas gracias tanto de Al como de mí. No puedo agradecerte lo suficiente por hacer todo lo posible por nosotros. Cada vez que teníamos una pregunta, devolvía nuestras llamadas rápidamente. Esperamos no haberte vuelto loco. Si alguna vez necesitamos un abogado para algo, USTED será a quien llamemos. Muchas gracias de nuevo. ¡Gran trabajo! John, me gustaría darte las gracias aunque Judy ya lo hizo. Usted es el major y el personal de su oficina responden llamadas en seguida. Definitivamente lo recomendaremos a nuestros amigos si necesitan sus servicios. ¡Gracias nuevamente por un trabajo bien hecho!

- Jon P. (Google) Judy y Al Crowe
boston workers compensation lawyer 5.0/5.0
boston truck accident lawyer
boston workers compensation lawyer
boston personal injury lawyer
boston car accident attorney