Do You Receive a 1099 for Workers’ Compensation Benefits?
Do You Receive a 1099 for Workers’ Compensation Benefits? No, you do not receive a 1099 for workers’ compensation benefits. The IRS treats workers’ compensation as tax-exempt income under Internal Revenue Code Section 104(a)(1) for occupational injuries or illnesses, which means recipients don’t report these benefits as taxable income and shouldn’t expect a Form 1099 for standard workers’ compensation payments. Why Workers’ Compensation Payments Are Usually Tax Free The IRS classifies workers’ compensation benefits as tax-exempt income under IRC Section 104(a)(1). Tax-exempt means the money you receive isn’t counted as income when you file your tax return. Benefits paid under…
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