Workers’ Compensation: Is it reportable and will it be taxed?

You must include workers’ compensation when declaring your worldwide income to the U.S. You must also file an FBAR if your foreign U.S. financial accounts exceed $10k in aggregate at any time during the year, including your superannuation account.

To determine whether your workers' compensation is taxable or not, we first have to determine the source and nature of such payments. The fact that it is taxable in Australia indicates that it may be taxable in the U.S. as well. However, you will receive a foreign tax credit in the U.S. for taxes paid in Australia on that income.

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