You will 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 our workers’ compensation attorneys about your concerns.
Understanding Workers’ Compensation 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 begin 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.
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 with disability benefits through Social Security.
For a free legal consultation, call 864-326-3333
Workers’ Compensation Settlements Are Beneficial in Some Cases
If you are considering agreeing to a settlement for your workers’ compensation benefits, knowing you do not have to pay taxes on a workers’ compensation settlement 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 waiting. It could allow you to pay off your home, move to a location that better fits your needs, purchase a vehicle, or take other steps to improve your quality of life.
Before you agree to an offer from the workers’ compensation insurance provider, you should meet with an attorney at Hammack Law Firm who regularly represents injured and sick workers. There are many considerations, 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 Case
Workers’ compensation in South Carolina is designed to be a way to help workers recover benefits when:
- They are hurt on the job
- They suffer a chronic injury because of work
- They 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.
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 law firm near you that regularly takes on workers’ compensation cases.
An attorney can review your case for free, and most provide representation with no upfront cost to their clients. They work based on contingency and only get paid once their client secures benefits and back pay or a settlement.
Let a Team Member from Hammack Law Firm Discuss Your Options with You Now
At Hammack Law Firm, our workers’ compensation team understands 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 challenging a denial of your benefits or addressing your concerns about a settlement. All calls are confidential, and your employer will never know if you called us for advice. If we determine that you have a valid claim, and that it benefits you to hire an attorney, we will do everything in our power to stand up for you and get you the compensation you deserve.
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 on Google to get a feel for our customer-centered approach. Call (864) 326-3333 now to speak with a compassionate team member in Greenville who is ready to help.