Serving injured workers

In Albany Since 1925

SPECIAL ANNOUNCEMENT : Workers’ Compensation Benefits in NY State has been significantly reduced by legislation that was passed in 2007 and 2017.

Can debts and taxes minimize workers’ comp?

| May 26, 2021 | Workers' Compensation

Workers’ compensation can be important for your recovery after an accident on the job. However, do regulations put your benefits at risk?

Somewhat unfortunately for your personal financial accounts, deductions like taxes are subtracted from your earnings before you receive your regular paychecks. When a job-related injury causes you to miss hours from work, the cost of medical care can seem even more troublesome.

Three considerations for receiving benefits

New York requires employers to provide workers’ compensation benefits to help injured workers recover. These benefits may cover both medical attention and lost wages, but should you expect deductions to affect approved payments?

  • Wage garnishment. Financial resources can quickly deplete when lost income combines with medical bills. Depending on your debt load, collection agencies might set their sights on your benefits. Thankfully, state and federal laws protect workers’ compensation from debt collection efforts.
  • Federal Taxes. Employers withhold a percentage of each employee’s pay for Social Security, Medicare and federal income tax. According to the IRS, however, your employer cannot take these deductions from workers’ compensation benefits.
  • State taxes. The Empire State also receives a portion of your earned income, although benefits for workplace injuries are generally exempt.

It’s important to recognize that your employer may not be the only one liable for unsafe working conditions. Injuries caused by a third party’s negligence may give you a reason to take legal action beyond filing a workers’ compensation claim.

You would be wise to seek counsel about your rights and responsibilities in terms of both the benefits and settlement funds available to you.