Workman's Comp and Disability insurance

I live in Florida and recieve Social Security Disability as well as Workman's Compensation from my former employer. Also while I was employed I financed a new car through the
companies credit union........ while doing the papers I checked that I wanted the disability insurance. So I am now totally disabled and the insurance company pays my car payments. Must I claim this as income? Also, am I right in thinking I have to pay taxes on my Social Security Disability AND my workman's compensation? Thank you....... Marcia
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Probably not, assuming that you paid the premium for the disability insurance on the loan from after-tax funds. See IRS Publication 525.

No. Workers' Comp is, by statute, exempt from Federal tax. Also Pub 525. How much, if any, of your SSDI is taxable depends on your other income. See line 20 of Form 1040. -- Phil Marti Clarksburg, MD
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Since you apparently paid the premiums, the insurance company's payments are not taxable income.

Workers compensation is not taxable. However, if you receive both SSD and workers compensation, your SSD payments normally are offset by a portion of the workers compensation you are receiving. This offset is shown on your SSA Form 1099 and the offset amount is treated as SSD received. The same tax rules govern the taxability of SSD as apply to social security benefits paid to retirement eligible beneficiaries. Up to 85% of your SSD could be taxable depending on the amount of other income, including your spouse's income if you are married and file a joint return. To determine if any of your SSD is taxable, see the worksheet on page 15 of IRS Publication 915. http://www.irs.gov/pub/irs-pdf/p915.pdf
Frederick Lorca
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