A:The Internal Revenue Service (IRS) does not get to tax workers’ compensation benefits, whether they are paid for medical treatment coverage, ongoing care, lost wages, funeral costs, or disability benefits. Although, if you are receiving SSDI benefits and workers’ compensation benefits, then some of your workers’ comp benefits could be taxed to keep your total income within SSD limits. You can talk to a local workers’ comp attorney or tax expert to get a better understanding of what you’ll be able to keep when taxes are factored in.