I have a new client. He is surprised that he recieved a SSA-1099 statement when he did not receive money from Social Security in 2009. He is 52 years old.
He started getting workers comp in 2007. He got it all of 2008 and received about $29k. Workers comp is non taxable. He never received any tax documents or reported any of it. In 2009 he also got approx. $29k from the same company that paid the comp in 2008. He never received any tax documents from them. Then, last month he received a statement from social security showing $18k in benefits paid in 2009. The description says "Workers compensation offset".
He never received any money from social security until January 2010. It was a check in the amount of $1,543. He doesn't think he should have to pay taxes on the $18k, because he never received any money from social security. I'm thinking social security reimbursed his workers comp company when it was determined that he was disabled. Social Security then sent him a statement for the amount they reimbursed the workers comp company. Is this correct? I assume he does have to pay tax on the $18k. Unfortunately he didn't have any withholding on the $18k and is stuck w/ a large tax bill.
He started getting workers comp in 2007. He got it all of 2008 and received about $29k. Workers comp is non taxable. He never received any tax documents or reported any of it. In 2009 he also got approx. $29k from the same company that paid the comp in 2008. He never received any tax documents from them. Then, last month he received a statement from social security showing $18k in benefits paid in 2009. The description says "Workers compensation offset".
He never received any money from social security until January 2010. It was a check in the amount of $1,543. He doesn't think he should have to pay taxes on the $18k, because he never received any money from social security. I'm thinking social security reimbursed his workers comp company when it was determined that he was disabled. Social Security then sent him a statement for the amount they reimbursed the workers comp company. Is this correct? I assume he does have to pay tax on the $18k. Unfortunately he didn't have any withholding on the $18k and is stuck w/ a large tax bill.
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