Generally, workers’ compensation benefits are not taxable at either the state or federal level. However, an exception to this rule exists when the injured worker also receives benefits from other programs, such as Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), and the combination of wage replacement and other compensation from the programs drive the amount the recipient receives through these programs over certain income levels. In these situations, the recipient may have to pay taxes on a portion of the benefits.