Texas SB2989 clarifies that wage replacement benefits for injured employees are exempt from federal income and employment taxes.
Texas SB2989 amends the Labor Code to clarify that wage replacement disability benefits paid by employers without workers' compensation insurance to employees injured in the course of employment are exempt from federal income and employment taxes. This change aims to ensure these benefits are treated similarly to workers' compensation payments for tax purposes. The act takes effect on September 1, 2025.
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