Yes.
The IRS allows employers to deduct the costs of required workers comp insurance premium payments. As per the federal tax code, insurance payments are deductible expenses for companies as costs incurred during the course of business. Employers can deduct the costs of their workers comp premium payments on their Schedule C, Profits & Losses.
If the work comp policy is required, the premiums can be deducted form both federal and state taxes.
Taxpayers may exclude their workmans comp benefits from their tax returns, but may not use a deduction. The IRS permits injured employees to exclude their wage replacement workcomp benefits if they were paid as per your state law.
Tax laws often change. Consequently, do not utilize this information in lieu of legal advice. Seek counsel from an attorney licensed to practice tax law in your state.