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Are Your Sickness and Injury Benefits Taxable?
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Please Note: This table is intended as a general overview. Additional rules may apply depending on your situation. For more information about your benefits, see "Other Sickness and Injury Benefits" in Publication 17. |
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Type of Benefit |
General Rule |
| Workers' Compensation | Not taxable if paid under a workers' compensation act or a statute in the nature of a workers' compensation act and paid due to a work related sickness or injury. However, payments received after returning to work are taxable. |
| Federal Employees' Compensation Act (FECA) | Not taxable if paid because of personal injury or sickness. However, payments received as "continuation of pay" for up to 45 days while a claim is being decided and pay received for sick leave while a claim is being processed are taxable. |
| Compensatory Damages | Not taxable if received for injury or sickness. |
| Accident or Health Insurance Benefits | Not taxable if you paid the insurance premiums. |
| Disability Benefits | Not taxable if received for loss of income or earning capacity due to an injury covered by a "no-fault" automobile policy. |
| Compensation for Permanent Loss or Loss of Use of a Part or Function of Your Body, or for Permanent Disfigurement | Not taxable if paid due to the injury. The payments must be figured without regard to any period of absence from work. |
| Reimbursements for Medical Care | Not taxable - but the reimbursement may reduce your medical expense deduction. |
Tax laws are subject to change at any time.
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