Off The Record: TRR Workers’ Comp Are Benefits Taxed
Bill: Hi. I’m Bill Turley. I’m one of the partners at Turley Redmond & Rosasco. And I am here today with my friend David Weinstein from Plainview, Long Island.
David: Thanks, Bill.
Bill: Dave, you had a question for me.
David: I did. You know, just, with Workers’ Compensation benefits, I was wondering, are those taxable to the person?
Bill: They are not taxable. No. And, it’s interesting because the Workers’ Compensation benefits are based on your average weekly wage. So it’s basically what your average weekly salary is with the employer where you sustained the injury. And, your maximum benefit is two thirds of that. So, if you think about it, most people are in that tax bracket where they take home two thirds of their pay.
Bill: So, that’s kind of the reasoning behind it. So, let’s say you make $900 a week gross. You’re going to come home with about $600 a week.
David: So, that difference is going to end up being that what you would have been what you paid in taxes, so then you end up with about the same amount.
Bill: So, someone who makes $900 a week, their maximum benefit rate is going to be $600. And, that is not taxed. Under the Workers’ Comp system, there is also something called Short-Term disability, or New York State Disability. And those benefits are not taxed, but they do take out Social Security. So, I’m not talking about regular long-term disability, or Social Security for that matter. I’m talking about that, it’s called Short-Term New York State Disability. And, the maximum rate is $170 a week, which is pretty sad. But, people will notice, if they’re on that benefit, okay, they will take out for Social Security. But, Workers’ Compensation benefits are not taxed, so far. Okay?
David: Hopefully, it stays.
Bill: Yeah. So, I’m Bill Turley. And this is my friend David Weinstein. And, if you have questions, you can reach us at nydisabilitylaw.com.