Charles E. Boyk Law Offices, LLC
A person receiving worker’s compensation benefits does not have to pay taxes on them. The employer is charged an insurance premium, which could be considered a tax based on the number of claims and how much is paid out under the claim.
If you have questions about Findlay workers’ compensation and taxes, reach out to a knowledgeable workers’ compensation attorney. They could explain which benefits are taxable and work to make sure you receive fair compensation.
Two major reasons one would want to get an attorney for their workers’ compensation case are to get the claim approved and identify available benefits. In addition to having medical bills paid, the injured worker may receive their lost wages, which is considered temporary total compensation. Their pain and suffering might be considered permanent partial disability compensation.
Potentially, the individual might get vocational rehabilitation if they cannot return to their previous job. They could settle the claim, giving up their rights, and get a lump sum settlement. Because several different options may be available, it is important to get legal advice from an attorney. To understand the rights and options related to workers’ compensation, getting a lawyer makes common sense.
The Bureau of Workers’ Compensation looks at the date of the injury and determines the amount of compensation the injured worker received before the date of their injury. The total amount is divided by 52, the number of weeks in a year. The result is the person’s average weekly wage. Only the prior 52 weeks are used to calculate the weekly wage for temporary total compensation under the claim. The person does not pay either state or federal taxes on the average weekly wage or the temporary total they receive.
If someone received compensation for a lump sum settlement for potential punitive damages, that is considered taxable income. When there is a lump sum settlement, their attorney works with the other attorney to phrase the language of the settlement agreement to try to make as much as possible of the compensation considered non-taxable.
An employer pays workers’ compensation benefits on behalf of their employees but does not pay workers compensation benefits for independent contractors. An employer may misclassify an individual as an independent contractor because the costs of maintaining employees are much higher than the costs for using independent contractors. Employers are required to pay Social Security and Medicare taxes as well as unemployment taxes on income received by their employees. When one is an independent contractor, they are ineligible for workers’ compensation benefits and the employer does not pay any workers compensation premiums.
There are certain tasks under Ohio Workers’ Compensation law that determine whether somebody is an employee or independent contractor. A worker is likely to be an employee if they work defined hours or use tools and supplies from the employer. An individual who is paid on an hourly basis, or takes direct orders from a supervisor, is likely an employee.
An independent contractor is paid a flat sum of money and uses their own equipment to complete a task. For example, a plumber fixes a leak in the employer’s basement using their own tools. They show up on their schedule and charge a flat fee or an hourly fee. They are in complete control of the situation. They are hired to complete an individual task, and no one supervises them.
For help handling your workers’ compensation claim, get in touch with an experienced attorney. They could help you understand Findlay workers’ compensation and taxes to make sure your claim is handled correctly. They could also help protect your interests in the event you are misclassified as an independent contractor. Call today to schedule a consultation.