Workers' Comp and Taxes in North CarolinaWhen you sustain an on the job injury in North Carolina, you are likely eligible for workers’ compensation. This no-fault insurance program is designed to provide benefits, including lost wages and medical expenses, until you are deemed fit to return to work by your physician.

Following approval of your claim, workers’ compensation will provide 2/3 of your average weekly wage until you are able to return to work. This benefit is currently capped at $978 a week, but it is reviewed annually and adjusted for inflation. While full wage compensation would be more desirable, workers’ compensation is not taxable, which provides some additional relief for workers and their families during the recovery process.

From IRS Publication 525: “Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. The exemption also applies to your survivors. The exemption, however, doesn't apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury.”

If you have questions about workers’ compensation in North Carolina, our experienced attorneys are here to help. We offer an obligation and cost-free consultation where we can collect information about your claim and provide you with honest answers about your best options. Use the contact form to the right or call us at 919-863-9397to schedule a consultation and learn more.

Light or Modified Duty

In some cases, an injured worker may be able to return to work in a limited capacity before he or she is able to resume all normal duties. During this time, it is possible to continue receiving Temporary Partial Disability (TPD) benefits through workers’ compensation if the modified duties have resulted in a lower weekly wage.

All wages paid by an employer are taxable at the state and federal level. If you are receiving both TPD benefits and a weekly wage, you will be required to pay taxes on the latter, though the former will remain tax exempt.  

It is important to note that TPD benefits will be modified if you return to work at a lower wage. In these cases, workers’ compensation will provide 2/3 of the difference between your former average weekly wage and your new pay rate. These benefits can continue for up to 500 weeks for eligible employees.

Help with Workers’ Compensation

White & Stradley, PLLC has a long and proud history of helping workers who have been injured on the job in Raleigh, Charlotte, and surrounding areas of North Carolina. Experienced, dedicated, and knowledgeable, our workers’ comp lawyers are committed to helping our clients navigate the complexities of applying for and receiving these benefits.  

If you have been injured on the job, call us at 919-863-9397to schedule a free consultation and learn how we can help.

Tags: 

For me, my work injury was a super scary event.  One of the most impressive things about the firm is that everything was handled by them.  All I had to do was concentrate on getting well.  My case went smooth and quickly.  I was thoroughly happy with the service that I received.