Workers Compensation come on 1099-R?

[AZ-Tax]

Is workers comp reported on form 1099-R? Is there a certain box or boxes checked that designates it as worker comp and if so which one or ones?

[AZ-Tax]

I think I figured it out, form 1099-R code 3 disability

Am I correct?

[S T]

Work Comp

I believe Work Comp benefits in general are non-taxable - Unlike some Disability payments

T/P can only collect Work Comp as a Work Related Injury and paid under the Workers' compensation act or similar law.

Pub 525

Workers' Compensation
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 exemption also applies to your survivors. The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury.

If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. For a discussion of the taxability of these benefits, see Other Income under Miscellaneous Income, later.
Return to work. If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages.

I have not seen Work Comp benefits reported on 1099R - Actually I have never seen Work Comp reported on any government form 1099R or W-2 -

Sandy

[BOB W]

Is it posible that IRS wants those figures so that they can look at overall income of a T/P when developing its DIF scope, if still used? Untaxed income would have a bearing on any IRS evaluation.

[S T]

I think no reporting

On Work comp Benefits

one of the items I can locate is an integration with SS benefits and disability

Usually a taxpayer can exclude workers' compensation from his or her gross income but may be required to include Social Security benefits, including disability benefits. A statutory formula considers several factors, including the amount of the taxpayer's Social Security benefits, other income and filing status, to determine whether he or she must pay taxes on this amount. However, when taxpayers receive workers' compensation rather than Social Security disability benefits and this compensation reduces the amount of Social Security they receive, the workers' compensation is taxed at the same rate as Social Security benefits.

As far as I can remember, there has never been a requirement to report Work comp Benefits -

so I would think it would not affect the dif score.

Just like VA Benefits are non taxable and don't affect the dif score.

Sandy

[PIGLEE]

Sometimes what people think is workmans comp, is either sick pay, or is on a policy that they pay for. That will come out on a W-2 (and it will look strange).

[S T]

What I have found

Agree Piglee, however, I don't believe I have seen a W-2 for work related occupational injuries covered under the Employer's Work Comp Policy

W-2 - sick pay (third party) is a continuation of income usually premiums paid by the employer - so it is taxable.

W-2 - Code J - is a third party sick pay that is paid by the employee and non-taxable

And I do not believe there should be a 1099R issued in relationship to Work Comp Benefits paid for occupational injuries.

It could be likely the 1099R is related to a disability payout where there was a change from actual wages to disability and pre-retirement and being reported under the catchall of "retirement benefits". There should be a code in Box 7, then you can refer to the Box 7 instructions

You might need to contact the adminstrator to find out the particulars of the reporting.

Sandy

[BOB W]

On Work comp Benefits

one of the items I can locate is an integration with SS benefits and disability


As far as I can remember, there has never been a requirement to report Work comp Benefits -

so I would think it would not affect the dif score.

Just like VA Benefits are non taxable and don't affect the dif score.

Sandy

I was talking out of my ___. Just fill in the blank. Sorry........................