It’s tax season. Time to talk about a question I am asked in every single case: are Longshore or Defense Base Act workers’ compensation benefits taxable? Take a look at IRS Publication 525, which discusses taxable and nontaxable income. On page 19, you will see a section titled, “Workers’ Compensation.” It says: Workers’ Compensation Amounts you receive as workers’ compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers’ compensation act or a statute in the nature of a workers’ compensation act. The exemption also applies to your survivors. The exemption, however, does not apply to retirement benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational illness or injury. If part of your workers’ compensation reduces your social security or equivalent railroad retirement benefits received, thatRead more