Ask an Attorney a Question for FREE!
Can an insurance company deduct a portion from your loss wages based on fed and state taxes normally paid on your wages?
Can an insurance company decide they are not going to pay you full loss wages because you normally pay federal and state taxes to your employer?
No they cannot.
If you are being compensated for wage loss, then this "income" (the payment by the insurance company) is taxable. The IRS and State will want their cut (at the end of the year when you have to declare your income). Therefore, to be fully compensated, they will have to take into account the amount of tax.
However, this does not apply for payments for pain and suffering.
Pain and suffering is not income for taxable purposes.
I hope this helps,
Auto Insurance Claim Advice
Click here to post comments
Join in and write your own page! It's easy to do. How? Simply click here to return to Got Questions?.
Please see more answers to recent personal injury and auto accident questions below:
For a Free Review of Your Case