The clock is ticking! Remember, this year’s tax filing deadline is April 17, 2018. If you’re doing your taxes on your own, you may be wondering if you need to report Minnesota workers’ compensation wage loss, permanent partial disability, or a settlement received in 2017. The answer is NO!
You are not required to pay income taxes on your work comp benefits, regardless of whether you received them on a weekly basis or as a lump sum settlement. Minnesota workers’ compensation benefits are considered to be compensation for a personal injury under the Federal Tax Code and are therefore non-taxable.
Other types of benefits that are payable as a result of a work-related injury may also be non-taxable, including PERA Police and Fire Plan or Corrections Plan Duty Disability Benefits, and MSRS State Patrol Plan and Corrections Plan Duty Disability Benefits.