When filing for workers’ compensation, you might understandably want to know what effect taxes will have on your settlement, benefits, or any calculations related to them. Fortunately, a trusted workers’ compensation attorney could provide answers. Speak with a lawyer about the tax implications of Glastonbury workers’ compensation claims.
Helping Someone Understand the Issue of Taxes on Their Claim
One of the main ways a lawyer could help someone is to make sure they are being paid the correct amount of benefits for their claim. That requires a calculation of their earnings for the last year (or for the length of their employment if they have been there for less than a year), a verification of the right number of defendants, and confirmation that the appropriate table is being used to give them the accurate weekly wage.
This is an area of concern when someone is a new employee. Often, an insurance company gives them a low weekly wage because they only have a couple of weeks of earnings or they have incomplete weeks.
In all of those situations, a lawyer needs to get involved to understand the person’s actual wage. The insurer usually has an interest in making sure the claimant’s base wage is as low as possible. It is helpful to have someone involved who knows how to do alternative calculations when making sure the wage is set appropriately.
How is the Average Weekly Wage Calculated in Connecticut?
The average weekly wage is used to determine the benefits someone receives on a weekly basis when they are out of work. It begins with the average of their last year’s earnings, after taxes are taken out. A general rule to obtain a rough calculation is to take whatever is deposited into one’s bank account or the amount that is printed on their paycheck at the end of a single week; then take two-thirds of that total. It is important to make sure the base number already has the taxes factored out, as some other states use the wage or salary someone earns before the taxes are taken out.
Potential Tax Deductions
Sometimes in a final settlement, portions paid out for penalties, for confidentiality, or sometimes for wages, are taxable without a reason. It is important to make sure the settlement is structured in a way that that protects the claimant. A lawyer could explain the tax implications of a local workers’ comp claim and why some deductions might be made.
Why Do Employers Misclassify Employees as Independent Contractors?
Some employers in Glastonbury misclassify employees as independent contractors because they do not want to pay payroll taxes, provide workers’ compensation, or other employment-related benefits. This is cheaper for them and can prevent extra work, but it hurts the workers in the process. In that way, the effect of taxes can damage someone’s workers’ compensation claim in Glastonbury even before an accident occurs.
A lawyer could help with that situation because a lot of people think they must be an independent contractor if they receive the 1099 tax form. But it is not up to the employer to decide what type of worker they are, there are a number of factors in the law that differentiate between full employees and independent contractors.
Learn the Tax Implications of Glastonbury Workers’ Compensation Claims with an Attorney
In Connecticut, taxes are factored into your weekly wage before making benefit calculations but it is possible to receive your settlement without taxable deductions as well. Your employer might even wrongly label you as a contractor in order to avoid payroll taxes. In any of these scenarios, you could find a lawyer to guide you. Call now to discuss the tax implications of Glastonbury workers’ compensation claims.