Lost Wages After a Car Accident

Lost Wages After a Car Accident

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Car accidents quickly become expensive. Just as you’re caught up in dealing with the pain and trauma of a serious accident, you also have to deal with mounting medical bills and other accident-related damages. When car accident injuries are serious, you may be unable to return to work in your previous capacity—or at all—but your bills and expenses can’t wait.

So what do you do after a car accident when serious injuries delay or prevent you from returning to work? When injuries from an accident keep you from earning a living, you can quickly use up savings, fall behind on mortgage, rent, and utilities, and become swamped with unpaid bills. That’s why recovering lost wages after a car accident is a key part of a successful personal injury claim. If you’ve had a car accident and suffered injuries due to someone else’s negligence, you deserve compensation for your lost wages as well as other accident-related damages. Contact an experienced car accident attorney in Westminster to explore your legal rights to compensation.

Proving Lost Wages After a Car Accident

Personal injury claims require proof of damages, including lost wages. Proof of lost wages could include:

  • Employer statements
  • W2 tax forms
  • Pay stubs
  • Medical reports and medical testimony

In some cases, car accident injury victims can claim future lost wages. For instance, if they have injury-related upcoming surgery, physical therapy, occupational therapy, or home healthcare scheduled for the future. If the accident causes a disability, the victim may also make a claim for diminished earning capacity which provides compensation for a decreased ability to earn a living.

What Types of Lost Wages Can an Injury Victim Claim?

Lost wages in a personal injury claim refers to any type of income the injury victim earned before their accident, either from an employer or from self-employment. It includes compensation for the following:

  • Gross hourly wages for the number of hours the victim typically worked per week
  • Typical salary
  • Commissions
  • Bonuses
  • Tips

If the victim’s usual work schedule included overtime, compensation for lost wages may also include their typical overtime earnings.

What if a Car Accident Victim Shares Fault for the Accident?

In modified comparative negligence states like Colorado, even injury victims who were partly at fault for a car accident can recover compensation for damages, including a portion of their lost wages, as long as they were less than 50% at fault. The amount they recover in lost income in this case will reflect their percentage of fault.

For example, if the accident victim was 20% at fault for the car accident and the injury keeps them out of work for a year, they’ll recover 80% of their wages. If their normal yearly income is $100,000, they’ll recover $80,000.

Is Compensation for Lost Wages Taxable?

In most cases, compensation for lost wages is not taxable in personal injury cases. The only exceptions include compensation for lost wages for non-physical injuries such as emotional trauma, PTSD, or anxiety. If your lost wages for emotional injury are provably related to a physical injury sustained in the car accident, they may also be exempt from taxation. Any interest earned on a sum for lost wages during the progress of the case may be subject to taxation. Your personal injury attorney can advise you on what part—if any—of your recovered compensation is taxable.