Are Workers’ Comp Awards Taxable in Maryland?

Workers’ comp benefits are paid to employees who are injured on the job or who suffer a work-related illness. However, many people are concerned about paying taxes on their workers’ comp benefits.  Because workers’ compensation does not reimburse you fully for lost wages, paying income taxes on the amount you receive could increase the financial burden caused by a work injury. Fortunately, workers’ compensation awards fall under the same category of non-taxable income as most compensatory damages in a personal injury case, disability benefits, and public welfare payments. At this time, workers’ comp awards are non-taxable if the funds are paid pursuant to the Workers’ Compensation Act. IRS Publication 907 provides additional information about the fully tax-exempt status of workers’ comp benefits. However, tax laws are always changing. Therefore, you always want to consult with a Maryland workers’ comp attorney to discuss tax and other issues related to your workers’ comp claim.

Workers’ Comp Benefits Available in Maryland

When you are injured in a job-related accident, or you are diagnosed with a job-related illness, receiving workers’ comp benefits is important. Workers’ comp benefits serve several purposes. The workers’ comp insurance company should pay the total cost for reasonable and necessary medical care related to the work-related injury or illness. However, you may need to seek the help of a Maryland workers’ comp attorney in some cases. For example, the insurance company may claim that your injury or illness is not work-related. In that case, your workers’ comp claim will be denied, and you will be responsible for all medical costs. Another problem that could prevent you from receiving the medical care you need for a work injury is the company refusing to pay for treatment it deems as unnecessary. If your employer or its workers comp insurance provider refuses to pay for valid medical treatments related to your work injury, you need to contact our office immediately. You have the right to appeal a workers’ comp decision, but you must file your appeal before the filing deadlines expire. You should not accept the denial of a workers’ comp claim without talking to an attorney. The Maryland workers comp attorneys of Pinder Plotkin offer free consultations so you can get the advice you need without worrying about paying for the consultation.

Maryland Workers’  Compensation Disability Benefits

Under Maryland’s workers’ compensation laws, an employer who is injured on the job or develops a work-related illness is also entitled to disability benefits. Disability benefits compensate the employee for a portion of the employee’s lost wages. There are several types of disability benefits you may receive under Maryland’s workers’ comp laws.

Temporary Disability Benefits

Employees receive compensation for a portion of their lost wages while they are unable to return to normal duties while recovering from a work-related injury. If an employee is unable to earn the same income as before the accident, but can perform some duties, the employee may receive temporary partial disability payments. The employee receives 50% of the difference between the income the employee earned before the injury and the income earned after the injury, subject to state maximum payments. If the employee cannot work at all because of the injury, the employee should receive temporary total disability payments. The amount of temporary total disability payments is based on the employee’s average weekly wage before the injury. The employer or insurance company should pay the employee an amount equal to two-thirds of the employee’s average weekly wage, up to the maximum Maryland weekly wage.

Permanent Partial or Total Disability Benefits

If a work-related injury or illness results in a permanent impairment, the employee may receive a workers’ comp award for the impairment. The amount received is based on several factors, including the severity of the impairment, the body part, and whether the person is totally disabled or can perform some work to earn income. It is very important that your impairment rating is correct because that rating significantly impacts the amount of money you receive for your workers’ comp award. Working with an experienced Maryland workers’ comp attorney can help protect you from your employer or its insurance provider assigning a must lower impairment rating to reduce the money paid for your claim.

Contact Our Parkville Workers’ Comp Attorneys for More Information

The workers’ compensation system should be easy to navigate and treat injured workers fairly. However, this is not always the case. Some insurance providers and employers put profit over an employee’s health and well-being. If you were injured at work, we want to help. Contact Pinder Plotkin LLC by calling 410-525-5337 to schedule your free consultation with a Parkville workers’ comp attorney. We represent injured workers throughout Maryland.   The information provided in this website is provided for informational purposes only, and should not be construed as legal advice on any subject. The information contained in this blog is also subject to change and should not be relied upon. Contact the Pinder Plotkin Legal Team for a FREE consultation.
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