I received workers’ compensation AND a third-party settlement—how are they taxed?

I received workers’ compensation AND a third-party settlement—how are they taxed?

Workers’ compensation benefits in Georgia are generally excluded from income under IRC § 104(a)(1). Third-party personal injury settlements (against the at-fault driver or property owner) are excluded under § 104(a)(2). The interaction between the two—particularly workers’ comp subrogation liens under O.C.G.A. § 34-9-11.1—affects how much of each settlement you keep, but both are generally tax-free for the compensatory injury components.