You do not have to pay taxes on a workers’ compensation settlement in South Carolina. Under S.C. Ann Code § 42-9-360, workers’ compensation income replacement benefits in South Carolina are tax exempt. This means you should never have to pay state or federal taxes on them, even if you reach a settlement with the workers’ compensation insurance company and do not continue to draw the weekly benefits.
All other benefits provided as a part of workers’ compensation in South Carolina are also exempt from income taxes. If you have any other questions about how agreeing to a settlement could affect your financial stability or your related benefits, you may want to speak with a trusted workers’ compensation attorney about your concerns. A lawyer from Hammack Law Firm can answer your questions.
Understanding Workers’ Compensation and Your Wage Loss Benefits
According to the South Carolina Workers’ Compensation Commission (SCWCC), injured or ill workers who cannot work and qualify for workers’ compensation can begin receiving benefits after missing seven days at work. The workers’ compensation insurance provider will start sending a weekly check for temporary total disability payments.
Your check should be about two-thirds of your usual income from your wages, tips, overtime, commissions, and other types of pay. After missing two weeks at work, you will also receive a check for the first seven days.
Who Qualifies for Workers’ Compensation Wage Loss Benefits in South Carolina?
Any employee of a covered workplace should be able to receive workers’ compensation benefits if:
- They suffered an injury or illness at work or because of work.
- They saw a doctor who diagnosed their injuries.
- They received or are receiving treatment.
- They filed a workers’ compensation claim within the designated time.
Workers’ compensation benefits are no-fault, so workers should qualify regardless of the cause of their injuries or who caused them. There are few exceptions, such as if the worker was using alcohol or drugs at work when the injury occurred.
If the workers’ compensation insurer denied your benefits, you should call a law firm. All these calls are confidential, and your employer will never know if you called a lawyer for advice.
All Workers’ Comp Benefits Are Tax-Free, But It May Not Seem that Way
Two situations could arise when it may seem like you are paying taxes on these benefits. This occurs when you return to work on light duty or begin drawing disability benefits through Social Security Disability.
If you go back to work on light duty, you will receive wages from your employer, but they are likely much less than you previously earned. Your workers’ compensation will pay you two-thirds of the difference between these wages and your previous wages.
The wages you receive from your employer will be taxed, while your workers’ compensation benefits will not. The situation is similar if you draw disability benefits through Social Security in addition to your workers’ compensation.
A Workers’ Compensation Settlement May Benefit You
If you are considering agreeing to a settlement for your workers’ compensation benefits, knowing you do not have to pay taxes on it could make a significant difference in your decision. Workers’ compensation settlements allow you to take a lump sum from the insurance company instead of relying on them to send you money each pay period.
If you are out of work for the foreseeable future, considering a settlement of your workers’ compensation wage loss benefits could get you the money you need now instead of having to wait. It could allow you to:
- Pay off your home
- Move to a location that better fits your needs
- Purchase a vehicle
- Take other steps to improve your quality of life
Before you agree to an offer from the workers’ compensation insurance provider, you may want to meet with an attorney who regularly represents injured and sick workers. There are many considerations for you to make, and giving up your right to future wage loss benefits may not be a good idea in every case.
Consult a Workers’ Compensation Attorney About Your Options
Workers’ compensation in South Carolina is a way to help workers recover benefits when they:
- Are hurt on the job
- Suffer a chronic injury because of work
- Become ill due to something at work
Employers must provide this type of coverage to their employees, and workers can file no-fault claims to receive coverage for medical care costs, wage loss benefits, and more.
However, this process is not always easy or clear-cut. Unfortunately, too many deserving workers have their claims denied, have their employers attempt to undercut their benefits, or encounter other problems with getting the care and support they need.
Take Action to Protect Your Best Interests
If you cannot get the workers’ compensation coverage or medical treatment you qualify to receive – or if there are other concerns you have about your on-the-job injury and your benefits – you should consider speaking with a lawyer who regularly takes on workers’ compensation cases.
An attorney with our firm can review your case for free. We work based on contingency and only get paid once our client secures benefits and back pay or a settlement.
Some Injured Workers also Qualify to File a Personal Injury Lawsuit
While South Carolina law prevents you from suing your employer for your injuries and losses in most cases, many hurt workers have valid third-party claims against another company or person. This could include:
- A property owner or site owner
- A distributor or vendor
- A customer
- A manufacturer of a defective part or machine
- A company tasked with maintenance or cleaning
If another party besides you, a coworker, or your employer caused your accident and injuries, you may have a case. You may want to speak with our attorney’s office about your options for a civil suit as soon as possible. You could recover additional losses through a personal injury claim.
Our Team from Hammack Law Firm Can Discuss Your Options with You now
At Hammack Law Firm, we understand how stressful it is to be hurt and unable to work but not have the benefits you deserve that could help you make ends meet. We are here to help you navigate this process, including maximizing your workers’ compensation settlement, challenging a denial of your benefits, addressing your concerns about a settlement, and filing a third-party claim.
We are a contingency fee firm that treats every client like a member of our family. You can review customer testimonials on our website or Google to get a feel for our customer-centered approach. We want to hear how we can help you. Call (864) 326-3333 now to speak with a compassionate team member in Greenville who is ready to help.