Do workers’ comp payments fall under taxable income? When we first meet with prospective clients, one of the first things they ask us is how much their workers’ comp benefits will be.
Most people who come to see one of our personal injury attorneys in Atlanta have never been out of work. They have no idea how workers’ compensation works. They assume it’s just like unemployment. They seem to understand that they won’t be paid their full salary. However, beyond that, they are not sure what happens.
To be honest, a lot of attorneys who don’t specialize in workers comp don’t truly understand how it works. That’s why we always recommend that injured workers call a workers’ compensation attorney in Atlanta, Georgia. This way, you know your lawyer will properly handle your claim.
Here, we will talk about what benefits you’ll receive while on workers’ compensation in Atlanta, Georgia. We will also explain whether these benefits are taxable. It can make a big difference if you have to pay taxes on top of losing a third of your pay.
If you still have questions or concerns about your own worker comp case, just give us a call. We can schedule your free, initial consultation and review your case.
What Benefits Will You Receive Under Workers’ Compensation in Georgia?
If your workers’ compensation claim is approved, you’ll receive three main types of benefits. Obviously, the insurance company will cover your medical bills. This includes bills for any medical treatment related to your workplace accident. It includes some or all the following:
- Hospital bills
- Prescription medications
- Durable medical equipment
- Travel to and from treatment
- Physical therapy
- Occupational therapy
- Chiropractic treatment
- Co-pays for doctor’s appointments
Of course, if there is any other bill related to your injuries, it will be covered.
The second type of benefit that you’ll be entitled to is vocational rehabilitation and career assistance. If you are unable to do your job because your injuries were too serious, you’ll be able to obtain counseling. This counseling will help you find a new career. It can also help you get back in shape to return to the job you held prior to your workplace accident.
The final type of benefit you’ll receive – and the one you’re probably most concerned with – are replacement wages. These will be discussed in detail below.
Your Personal Injury Attorneys in Atlanta Will Ensure You Get Replacement Wages
One of the most important things about workers comp is that you’ll receive biweekly replacement wages. The amount you’ll receive is based on your average weekly wage. However, you will not receive your full salary. Instead, you’ll be paid 2/3 of your average weekly wages.
These payments will start once you have missed at least 7 consecutive days from work. Once you’ve missed more than 21 days, you’ll receive backpay for the first seven days. The most you can receive for any given week in Georgia is $675. Unfortunately, for those people living in Georgia, this is one of the lowest rates in the country. You cannot receive more than this amount for any given week.
There is also a limit to how long you can receive benefits. In Georgia, this limit is 400 weeks. This is an awfully long time. 400 weeks comes out to be just under 8 years. The odds of someone still collecting workers’ compensation for that long are slim to none. While we’ve seen it happen, it is very rare. By that point, most people have either fully recovered or settled their case.
Do You Have to Pay Taxes on Your Replacement Wages?
One of the important questions some of our clients ask is whether their benefits are taxable. As we explained earlier, your workers’ comp benefits will only pay 2/3 of your average weekly wages. You may wonder why this is. Where does the other third go?
While your personal injury attorney in Atlanta can’t get you any more than 2/3 of your weekly wages, they can give you some good news. Your benefits aren’t taxable. Georgia follows federal law when it comes to taxable income. Since the federal government does not tax money received through workers comp, neither will the State of Georgia.
In a way, this almost makes up for the fact that you only get 2/3 of your pay. For some people, this actually works out to their benefit. Depending on other sources of income and your tax bracket, this can be a win-win. Unfortunately, for people who earn more than $1,000 per week, it is not as sweet. Not only will you only receive 2/3 of your pay, but you’ll over be limited to how much you can receive.
Imagine that you usually earn $2,000 per week. When you calculate 2/3 of this amount, you should receive $1,320 per week. In Georgia, however, the weekly maximum benefit is only $675. This means you’ll be missing out on close to $700 per week.
Most people can’t afford to pay their bills if they lose this much income. All you can do is pray that the medical care you receive will help you return to work as soon as possible.
If You Have Questions About Workers Comp, Call One of Our Personal Injury Attorneys in Atlanta
If you’re already out on workers’ compensation, you probably don’t have anyone there to answer your questions. Your employer probably isn’t updating you on the progress of your claim. The insurance company isn’t going to communicate with you aside from sending you letters. They won’t even tell you if your income is taxable! You need to talk to an experienced personal injury attorney in Atlanta, Georgia.
Our associates have decades of combined experience handling workers’ compensation cases. We understand the law, including the tax law and how it affects your benefits. We can answer any questions you may have. We can also tell you what to expect with your case. All you have to do is call and schedule your free, initial consultation.
You can bet your employer will have a team of lawyers for them. You shouldn’t have to deal with this alone. And since you don’t pay us a dime until you receive compensation, you have nothing to lose.