I settled a work comp case with my employer and was taxed on the settlement. How do I deduct this on my taxes?
They taxed it as regular income as if it was a regular paycheck though on the check it says “lump sum settlement”. Now I’m not sure where on the tax forms I can deduct it! HELP!!
My lawyer said the settlement is completely tax free but they took out taxes on the check and I received a W-2 showing the taxes included. Now I need to figure out how to deduct the taxes from the settlement on my tax return.
Whoever handled your workers comp case needs to revisit it and get it fixed. Workers comp is not wages and should not be reported at all.
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