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In California, is a settlement for Workers Compensation considered taxable or non-taxable income?

Los Angeles, CA |

I received temporary disability payments for about 2 years under Workers Compensation Insurance for California. I then received a final one lump payment of 24,000 as a settlement.

Attorney Answers 2

Posted

The only portion that would not be personal income money specifically allocated to personal injuries. The portion allocated to lost past or future income will be considered wages for tax purposes.

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Posted

Your only real tax concern is allegations of 132a Discrimination within your claim, because back/future non-TTD wages are involved. If 132a Discrimination was not alleged/settled/dismissed, the rest is tax-free.

We offer general concepts, but you should give ALL your facts to a licensed Attorney in your state before you RELY upon any legal advice.

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