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compensation for personal injuries or sickness” generally are not
included in gross income. Sec. 104(a)(1).
Petitioners contend that the Social Security disability
benefits constitute workmen’s compensation within the meaning of
section 104(a). We have previously held, however, that Social
Security disability benefits are not workmen’s compensation.
Green v. Commissioner, supra. A statute is in the nature of a
workmen’s compensation act if it allows disability payments
solely for service-related personal injury or sickness. Haar v.
Commissioner, 78 T.C. 864, 868 (1982), affd. 709 F.2d 1206 (8th
Cir. 1983); Byrne v. Commissioner, T.C. Memo. 2002-319. The
Social Security Act does not qualify because it allows for
disability payments regardless of whether the individual was
injured in the course of employment. See 42 U.S.C. sec.
423(d)(1)(A)(2000); Green v. Commissioner, supra. Accordingly,
the Social Security benefits that petitioner received are
includable in gross income as provided by section 86.
Section 86 taxes Social Security benefits pursuant to a
formula. Married taxpayers filing a joint return whose modified
adjusted gross income plus one-half of their Social Security
benefits exceeds an “adjusted base amount” of $44,000 must
include up to a maximum of 85 percent of their Social Security
benefits in gross income. Mikalonis v. Commissioner, T.C. Memo.
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