Discussion:Firefighter w-2 wages
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Discussion Forum Index --> Advanced Tax Questions --> Firefighter w-2 wages
Discussion Forum Index --> Tax Questions --> Firefighter w-2 wages
| 8 October 2010 | |
| I am preparing a return for a firefighter that received wages report on a w-2 while he was out of work for cancer treatment. Are these wages nontaxable due to presumptive cancer laws? If so, how would you recommend backing out the wages and documenting on the tax return.
Why wouldn't the wages have been paid as workers comp? thank you for any help | |
| 8 October 2010 | |
| what section of the code contains the presumptive cancer laws?
Maybe under the Alcohol Tobacco and Firearms sections? | |
Tax Writer (talk|edits) said: | 8 October 2010 |
| If it's reported as wages, presumably it's sick pay, and that is taxable as wages. It's a W-2, so It needs to be reported on the return. | |
| 8 October 2010 | |
| Maria implies that the cancer was related to the employment. | |
| 8 October 2010 | |
| 104(a)(1) [worker's comp exclusion] would not apply if the firefighter was required to perform services in exchange for the wages.
Also, amounts paid under the presumptive statutes are taxable if the presumption is irrebuttable. | |
| 9 October 2010 | |
| I'm guessing disability pay paid via the W-2 and the ER paid 100% of the premiums. Or, if the EE contributed to the premiums, he did it on a pre-tax basis. | |
| 9 October 2010 | |
| Are you in California? I can help you if you are but not for any other state. | |
RoyDaleOne (talk|edits) said: | 9 October 2010 |
| Some payments for disability that are job related for government employees used to be nontaxable income, may still be.
Did this 25 years ago for a client, who was a police officer who shot and killed a person. Never recovered. The IRS audit this every 4 to 5 years never lost yet. The Union, the City and the IRS were all involved in the issue. | |
| 12 October 2010 | |
| This is what I have come up with. A firefighter has a clean physical, was a full time firefighter then develops a cancer which may be a result of exposure to heat, radiation or carcinogens - they provide a list of the cancers, then the cancer is presumed to be job-related. Under Mass. general law, they are granted leave without loss of pay for any job-related injuries. It is paid as regular compensation; therefore, included in the w-2 as wages. The sick pay box is not checked.
From what I've read regarding workers comp, you consider the nature of the statute under which they are paid. My understanding is that since the wages were paid in accordance with the Mass law regarding job-related injuries, then the payments qualify to be considered worker compensation. At this point, I'm planning to back the wages out as an adjustment on line 36 of the 1040. Also thinking I should attach form 8275 and reference code section 104(a) (1) along with a letter from the fire chief stating that he was unable to perform duties during cancer treatments. Could also reference the Mass general law-Part 1, title VII, Chapter 41, Sect 111f. Thanks again. Very much appreciate any advice here. This is a new one for me. | |
| 12 October 2010 | |
| What City/Town in Massachusetts? It would be unusual that such pay would be included in the W-2. Years ago Boston firefighters out on "job injury" got a letter from the Commissioner (or Asst.) certifying that the firefighter was paid wages, due to an on the job injury, in lieu of workmen's compensation which were included in his/her W-2 at a base rate from xx/xx/xx to xx/xx/xx which included so many holidays. Then, we would make manual calculations, attach the letter & computations, and deduct this amount on the other income line, now line 21, a negative or deduction towards total income, not an AGI adjustment. This practive stopped in the early 90's and now the "job injury" pay is not included in the W-2. See Mass DOR LR 80-33 related to your site.
As to if and when the cancer is determined to be job-related the firefighter may end up with a disability pension under which just the annuity portion (his/her contributions) of his pension would be federally taxable and 100% non taxable anyways to Massachuetts, since contributory government pensions in Mass are non-taxable to begin with. As to the fed'l taxable amount on the 1099R this is reduced under the annuity tables based on the amount of after-tax (pre-1/8/1988) contributions to the plan. | |
| 12 October 2010 | |
| DgR - DOR LR 80-33 refers for qualified pension plan rollovers. Did you mean 80-32?
I do have a letter from the fire chief stating when he was out for cancer treatments and the payroll reports showing the checks issued during that time period. They are now retired on disability - 2010 | |
| 12 October 2010 | |
| The retirement payments may qualify for 104(a)(1) if the presumptive statute is rebuttable. My understanding is that Massachusetts's presumptive statute is rebuttable. | |
| 12 October 2010 | |
| Sorry, meant 80-32. Sounds good, that is the letter from the Fire Chief. Wonder what that Town/City does for other police/firefighters out on more defined on the job "job injuries"
as to W-2 preparation, no co-ordination with the Town Accountant? | |
| 12 October 2010 | |
| DgR - what do you mean - no co-ordination w/ town accountant? | |
| 12 October 2010 | |
| Would you bother with attaching the 8275 form explaining the adjustment? | |
| 12 October 2010 | |
| Retired on disability is not a catchall phrase meaning non-taxable. I assume you have determined the difference between disability retirement by reason of a non-job related condition (ordinary diability) and as a result of injury or hazard while in the performance of duties (accidental disability). Just because the individual retired on disability does not turn taxable paid sick days into non-taxable "in lieu of workmens compensation". Many employers provide paid sick days to accommodate short-term worker health problems and the early stage of what turns out to be a longer problem. (google Massachusetts Contributory Retirement Systems).
What I meant by town accountant was, he/she is responsible for W-2 preparation and should know the State laws. | |
| 13 October 2010 | |
| I'm working with income before he was on retirement - wages paid while out for cancer treatment. I believe the Mass ruling referenced early said they are not paid workers comp., therefore these payment may be treat as w/c.
I'm going to back it, attach the letter, complete the 8275 and reference code 104 a 1 and the mass ruling. | |
| 13 October 2010 | |
| Sounds like sick pay without the disability retirement beind deemed job accidental disability. | |
| 14 October 2010 | |
| In order to qualify for the 104(a)(1) exclusion, the wages must be paid under a worker’s compensation statute. You might want to cite the specific state statute that authorizes the wage continuation. I believe the statute is Massachusetts General Law, Chapter 41, Sec. 111F.
Sec. 111F. Whenever a police officer or fire fighter of a city, town, or fire or water district is incapacitated for duty because of injury sustained in the performance of his duty without fault of his own, or a police officer or fire fighter assigned to special duty by his superior officer, whether or not he is paid for such special duty by the city or town, is so incapacitated because of injuries so sustained, he shall be granted leave without loss of pay for the period of such incapacity;'' | |
