- 4 - determined that the payments petitioner received from PERS should not have been excluded from income and that petitioner was liable for a $9,148 deficiency. Discussion Section 104(a)(1) provides that gross income does not include amounts received under workers’ compensation acts as compensation for personal injuries or sickness. The regulations expand the scope of section 104(a)(1) to include “a statute in the nature of a workmen’s compensation act which provides compensation to employees for personal injuries or sickness incurred in the course of employment.” Sec. 1.104-1(b), Income Tax Regs. However, “section 104(a)(1) does not apply to a retirement pension or annuity to the extent that it is determined by reference to the employee’s age or length of service, or the employee’s prior contributions, even though the employee’s retirement is occasioned by an occupational injury or sickness.” Id. Nevertheless, a statute that conditions eligibility for benefits on the existence of a work-related injury or sickness may qualify as a workers’ compensation act for purposes of section 104 even though those benefits are called “disability retirement benefits.” See Take v. Commissioner, 804 F.2d 553, 557 (9th Cir. 1986), affg. 82 T.C. 630 (1984). A statute that fails to distinguish between work-related and other types ofPage: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011