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Are maintenance benefits taxable?



Hello.  In this short video, I want to talk to you about whether or not maintenance benefits that you’re being paid after your maritime injury are taxable to you at the end of the year.  The short answer is no they are not, but I want to mention two quick points.


If your company keeps paying you wages after your maritime injury, then those are going to be taxable just like they would be if you continued working offshore on the rig, on the barge, or on the boat or vessel.  So make sure that you’re not being paid wages after your accident, and your company’s actually calling it and paying you maintenance.


The second point I want to talk about is if they start paying what are called advances.  A lot of times companies will pay two checks.  One check will say maintenance on it, the other check will say advances.


Well, there are a few quick things about advances to know.  The first is the company may be characterizing those as actual wages to you and you won’t know that until the end of the year when they send you a W‑2 or 1099 for those advances that they paid you in which case those advances are then going to be taxable to you.


Second very important point is the advances usually the company will want back at the end of the settlement.  If you do a settlement on your claim, a lot of times the companies will argue that they’re entitled to be repaid those advances or if you go to trial, most of the times the companies are allowed to get that money back out of any type of verdict you get.


So the thing to remember is that your company should be paying you maintenance after your accident.  Maintenance is not taxable to you and maintenance should be enough money for you to live on and pay your bills each month after your maritime injury.


If your company tries to divide that amount into a small maintenance check and a larger advance check, I strongly recommend you talk to them about that, tell them you want everything paid to you as maintenance benefits, and you want everything categorized as maintenance benefits.


Call us (504-680-4100) if you have any questions about your maintenance benefits.  We have a worksheet online that you can download that basically tells your company how much you need each month to live and it tells them to pay you that as a maintenance benefit to you.

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