The benefits from workers’ compensation are typically not taxable in Texas. You do not need to claim the income benefits from workers’ compensation you receive on your taxes. Still, we encourage you to speak with a financial professional to make sure that you follow all state and local tax guidelines.
Texas employers are not required to carry workers’ compensation
Most states require employers to carry state-regulated workers’ compensation insurance. According to the Texas Workforce Commission (TWC), Texas does not have this requirement. However, many private employers in the state still provide this coverage for work-related injuries and illnesses. As such, companies who hire government contractors are often required to offer workers’ compensation, per the Texas Department of Insurance (TDI).
We encourage you to consult your legal or financial professional if you received tax paperwork for workers’ compensation benefits.
Understanding workers’ compensation in Texas
If you received benefits from workers’ compensation, you know that it is designed to reimburse you for expenses from work-related injuries or illnesses. These could include medical bills or some of your lost wages. Benefits could also cover funeral and burial costs if your loved one passed away from the incident.
Other facts of workers’ compensation you may not be aware of include:
- You must notify your employer about an injury or illness before they can file a workers’ compensation claim within 30 days.
- You may be asked to see a physician or specialist chosen by your employer before you can receive workers’ compensation benefits.
- You usually have one year to file a workers’ compensation claim.
Generally speaking, if your employer was negligent or your injuries were preventable, you could collect workers’ compensation benefits. They are not responsible for your damages if:
- You intentionally caused your own injuries.
- You were intoxicated when you got hurt at work.
- You were hurt outside of working hours.
- One of your coworkers or another third party caused your injuries.
- “An act of God,” such as a hurricane or flood, caused your accident.
You might be financially responsible for medical bills, therapy, and lost work days in any of these instances.
Another option for financial recovery for a work-related accident or injury
If you are injured on the job in Texas and your employer does not have workers’ compensation insurance, another option is filing a personal injury lawsuit. Some forms of damages you can claim in a lawsuit include:
- Past and future medical bills
- Past lost wages
- Lost future earning power
- Mental anguish
- Pain and suffering
Depending on which damages you recoup in your lawsuit, you may have to pay taxes on a portion of your settlement or court award. One of our lawyers can tailor your lawsuit in a way that reduces your obligation to pay tax.
How long you have to file a lawsuit against your employer
Under Texas law, you usually have two years from the date of the accident to file a lawsuit. Make sure you comply with this deadline. If we delay in getting started on your case, we take our chances because:
- The company might delete video footage of the accident from their records.
- Eyewitnesses might misremember the event.
- The Texas court might keep you from seeking financial recovery from your employer.
Getting our team involved early on in your case can help ensure that evidence is collected quickly and that you meet all state-imposed deadlines.
If we find that filing a personal injury lawsuit isn’t the legal route for you to take, our team will help you explore your options for recovering awards.
A lawyer with our firm will protect your rights as an injured worker
Workplace injury law and workers’ compensation can be confusing, but a workplace injury lawyer with our firm can manage your case if you were injured on the job.
- Collect and review evidence
- Determine who was responsible for the work accident
- Handle communication with your employer’s insurer
- Fight a denial of your benefits
- Help you file your workers’ compensation claim, appeal, or an injury lawsuit
- Manage settlement negotiations
- Be your advocate throughout legal proceedings should your case come to that stage
Our attorneys have been representing clients injured by others’ negligence since 2002. Now is the time to see how we can be of assistance to you after your workplace injury.
Connect with D. Miller & Associates, PLLC™, to start your case today
By working with a financial advisor and a personal injury lawyer on our team, we can determine if you have to pay tax on your workers’ compensation benefits and how much. We will then determine the best option for you and go after the financial recovery you deserve, whether that is through workers’ compensation or an injury lawsuit.
For a case evaluation with a member of the D. Miller & Associates, PLLC™, please call or reach out to us online to get started.