A workers compensation settlement provides financial relief during one of the most trying times in your life. As beneficial as this lump sum of money is, you may wonder if the state of Montana will require you to pay taxes on it.
In most instances, injured workers who receive settlements from workers comp are not taxed and are not obligated to report it on their tax returns. You can use the money to pay medical expenses, replace lost income, and support your family and household.
However, in some cases Montana may tax a workers comp settlement if the injured worker is paid from numerous insurance claims or is receiving Social Security and disability benefits. This person would be obligated to report and pay taxes on a small portion of the settlement.
You may be unsure of whether or not you should list your workers comp settlement as income on your 1040 tax return. You do not want to be taxed on money that you are not obligated to report. If you make a mistake and report and pay taxes on it as income, you may not receive that money back from the state.
To avoid an expensive error when filing your taxes, you should consult an experienced Missoula personal injury attorney. Your attorney will be able to advise you about filing taxes after an on-the-job injury and receiving a settlement from your employer.
With an experienced lawyer from Bulman, Jones & Cook guiding you, you can file your tax return with the assurance that you are complying fully with the state’s workers comp and income tax laws. If you are obligated to report and pay taxes on a portion of the settlement, you will pay the correct amount and safeguard the remainder of your money when you allow a skilled workers comp attorney to assist you.
Taxes are the last thing you want to worry about after being hurt on the job. You can ease your worries and protect your settlement by retaining a skilled workers comp lawyer. Your attorney will advise you on when to report the settlement as income.