Workers’ Compensation Benefits, Creditors, and Taxes

Under North Carolina law, workers’ compensation benefits are protected from creditors. This means that the benefits cannot be assigned to anyone else. Rather, benefits are paid directly to the employee or to the Estate of the employee in case of the employee’s death. Creditors do not have a direct interest in the proceeds.

Additionally, the benefits are not taxable. If the employee is able to work, then the wages will be subject to tax. Workers’ Compensation benefits are not paid in the amount of one’s full wages. The benefits for living employees are 2/3 of the lost wages. The benefits payable to an Estate for the spouse or children are also significantly less than 100%. In any event, workers’ compensation benefits or settlements are not taxed under North Carolina Law, nor are they taxed under federal law.

Employees also cannot be required to reimburse the employer for the workers’ compensation insurance premiums. Any such contract will be deemed invalid. Moreover, the employer may be subject to a fine of up to $500 and a misdemeanor charge if such premium payments are deducted.

Joe Miller Esq. fights for injured workers

Joe Miller, a North Carolina and Virginia workers’ compensation and personal injury lawyer, fights for injured workers. He’ll help you fight for the money you need, and he’ll review and prepare your claim, confront any employer challenges, and work with your medical team. You have a right to be as healthy as your were before your injury. Contact Joe Miller at Joe Miller Law, Ltd., by calling (888) 694-1671 today.