It’s that time of year again! Tax time! This year’s tax filing deadline is April 18, 2017. If you’ve procrastinated, or you’re doing your own taxes, you may be wondering if you need to report your Minnesota workers’ compensation benefits. In other words, are your Minnesota work comp wage loss benefits taxable? 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 therefore are non-taxable.

Frequently, employers and insurers who are involved in Minnesota workers’ compensation cases do not understand that even if an employee separates from his or her date of injury employer, he or she is still entitled to rehabilitation services of a Qualified Rehabilitation Consultant (QRC). These rehabilitation services include job placement services. A QRC will help an injured worker return to work at a different job within his or her restrictions.

Hi, my name is Jen Yackley and I’m an attorney at Meuser Law Office, P.A. Our law office specializes in workers’ compensation, PERA disability benefits, MSRS disability benefits and personal injury on behalf of workers injured in the course and scope of their employment in Minnesota. I grew up in Canby, Minnesota, a small town in Western Minnesota. I earned my Bachelor’s degree from Beuna Vista University in Storm Lake, Iowa, and went on to earn my Juris Doctor degree from Hamline University in 2008. I began working at Meuser Law Office as a law clerk while I was in law school in 2007 and I’ve been there ever since. I began practicing as an attorney in 2008.

While I was in law school, my husband sustained an injury in the course and scope of his employment doing construction work. The work comp insurer denied that he was an employee within the meaning of the work comp laws and they denied his claim. I saw first hand what it was like to deal with a work injury when work comp is refusing to pay for medical expenses and refusing to pay for your wage loss. He went to trial and he won, so I saw the whole process start to finish and we obviously had a good result. I have seen what it’s like to not only go through a case where the work comp insurer is denying your claim, but also what it’s like when the insurance company is actually paying your claim.

PERA stands for the Public Employees Retirement Association, an organization that operates only in the State of Minnesota. Generally speaking, PERA provides and manages the benefits for certain public employees—for example, retired government workers, police officers and firefighters—who worked for local governments throughout the State. Currently, PERA serves over 150,000 public employees and pays benefits to more than 40,000 retirees, survivors, and disabled members. This article explains PERA’s role in providing disability benefits and workers’ compensation.

The first step towards eligibility is to be a PERA member. Under Minnesota law, most non-elected public employee positions—like police officers, firefighters, correctional officers and employees working for state counties, cities, townships, and public school districts—are automatically enrolled. However, some public employees have the option to participate as a member of PERA. Typically, optional membership is offered for certain elected officials, volunteer ambulance personnel, city managers, and physicians employed by local governments.