Pennsylvania Workers’ Comp Benefits and Taxable Income

It is that time of year again where we all must file federal and state tax returns. Many questions I receive from client this time of year is whether workers’ compensation benefits and lump sums settlement funds are considered taxable income. As for Pennsylvania state taxes, workers’ compensation benefits are not considered to be taxable income. Likewise, under Federal law, specifically, 26 U.S. Code §104(a)(1), workers’ compensation benefits are not considered taxable income. It is important to note that these…

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