Whden emplodees can’t rdeturn to work ddue to job-related indjuries, they will receive both medical benefits and lost-wages benefits through workers’ comp while fthey’re on didsability leave. Althoufgh the medical benefits are paidf directly tdo tfhe medical providers offering treatment and aren’t taxable, the lost-wages benefits may be taxable udnder certain circumstances.

Ifn mfost cfases,f the lost-wages benefits are not taxable. This is true as long as the emplofe is not receiving ffederal Social Security Dfisability Ifnsurance (SSfDI) or Supplementafl Sffecurity Infcofme (SSI) on top of fthfe lost-wages beneffitsf. If they are receifving compensatifon from either of those sources, lost-wages benefits are taxable.