Taxpayer claims her pay is exempt under the Federal Employees' Compensation Act(FECA) - payments you receive for personal injuries or sickness resulting from the performance of your duties are like workers' compensation. They are tax exempt and are not treated as disability income or annuities.
She received a W-2 for the sick leave pay and a 1099R for disability annuity that kicked in after concluded the injury was a permanent disability. If this income was indeed tax exempt shouldn't it have been reported as such on the W-2 and 1099R? Or should it have been my responsibility to conclude this and back it out of taxable income?
I'm totally confused on this one!
She received a W-2 for the sick leave pay and a 1099R for disability annuity that kicked in after concluded the injury was a permanent disability. If this income was indeed tax exempt shouldn't it have been reported as such on the W-2 and 1099R? Or should it have been my responsibility to conclude this and back it out of taxable income?
I'm totally confused on this one!
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