Workers' compensation and Social Security disability benefits are supposed to ease that financial strain. But those benefits don't always stretch as far as an injured worker really needs them to. For that reason, a recent decision by the U.S. Tax Court on whether workers' compensation benefits can be excluded from taxable income is of significant concern.
The court held that certain workers' compensation benefits were taxable as Social Security benefits under section 86(d)(3) of the tax code.
For rest of story see: Read more: http://www.disabled-world.com/disability/legal/tax/taxability.php#ixzz1P1h6NzJ7