TX SB2989

Classifies wage replacement disability benefits paid by employers who do not carry workers' compensation insurance as payments "in the nature of workers' compensation" when paid to employees injured in the course and scope of employment

Applies this classification solely for federal tax purposes, allowing these benefits to be excluded from taxable income and exempt from federal employment taxes

Targets employers who opt out of the traditional workers' compensation system but still provide wage replacement benefits to injured employees

Declares the legislation is a clarification of existing law rather than a change, preventing interpretation that prior law was inconsistent with these provisions

Takes effect September 1, 2025