Question

milton was working at a construction site where the building was infected with mold and mildew . this cause him to have a serious sinus infection.Milton filed for workers compensation, he reported this compensation in his current tax return. Should he have reported it? why or why not? Can milton claim workers compensation if he got the infection while building his own house? why?

Answer 1

Workers compensation is sort of a insurance payment by the employer to the employee who suffer any injury of sickness due to work.

The compensation received as above need not have been reported by Milton in his tax return since it is an exempt income.No amount received as worker's compensation is taxable and hence need not be reported in tax return.

If Milton got the same infection while building his own house,he cannot claim workers compensation because it is his personal work/project and not any job /professional work.Workers compensation is paid by employer if employee suffers anything during the course of work.In this case since there is no employer employee involved, it's a personal work and hence there is no scope of workers compensation.