A W-2, or wage and tax statement, lists the wages earned by a worker during the year, as well as the taxes that were withheld from that worker's pay. These forms must be mailed to employees by January 31 for individual income tax purposes.
Taxation On Workers Compensation
The benefits that are received through workers' compensation are not subject to either federal or state taxes. Therefore, it will not show up on a W-2 as wages earned.
Definition of Workers' Compensation
Workers' compensation is a combination of money and medical benefits that are paid to a worker who sustains an injury as a result of a workplace accident and injury or occupational disease. As explained by Workerscompensation.com, the employer is free from being sued by the employee, in exchange for the benefits and admittance of a limited liability for the injury.
Returning To Work
If you qualify for workers' compensation benefits but return to work, the wages that you receive for working are taxable. This is true even if you are on light-duty assignments.