Work Injuries, Liens, and Taxes – Who can go after your work injuries? Typically, injured workers get concerned because they don’t know if they have to pay taxes for what they received under Workers’ Compensation.
Taxes
In Colorado, your Workers’ Compensation benefits are not taxed, they are not considered income, even compensation from lost wages, since you suffered a loss and you’re being compensated for that loss it isn’t considered income by the IRS.
Liens and garnishments
Your Workers’ Compensation benefits are also protected in other ways, for example, they’re immune from liens and garnishments.
A lien is, for example, if you owe somebody money and they get a judgment against you, they serve a lien to your bank, saying that whatever money you have in your account you have to give it to them.
A garnishment is somewhat similar, if you owe somebody money and they have a judgment against you, they can send a notice to you employer or to somebody who owes you money saying that rather than paying you they need to pay them.
Workers’ Compensation benefits are immune from almost all liens and garnishments, so if you’re running behind on bills and are being pursued by predators it’s really important that you keep your Workers’ Compensation money separate and openly declared, don’t hide it or don’t give it to somebody else to put in their name.
Child support
One kind of lien that’s recognized under the Workers’ Compensation Act is for child support.
If you owe child support, Workers’ Compensation can send up to half of your benefits to satisfy that back-due child support.
We’re here to help
The cases can be very complicated and fact-dependent, so if you or your loved ones have been injured on the job in Colorado, we can help you. Call or text us at 970-356-98-98, all of our consultations are free and confidential.
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