Is Settlement Money Taxable?

by Victoria
(Colchester VT US)

Is the money that you receive from a settlement for an injury taxable? And if so how much?

Thanks for any info you can give.

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Is Settlement Money Taxable?

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Settlement Money
by: Law Lady

This is an excellent and common question. Settlement money that is attributed to physical injury, pain and suffering is not taxable because it is not considered "income."

Settlement money that is identified as income replacement or lost wages is taxable just as income you would have actually received would be.

This is why the language of a settlement release must be accurately drafted.

Since laws change frequently and across jurisdictions you should get a personalized case evaluation from an attorney licensed in your state (if you haven't already). Find an experienced local attorney to give you a FREE personalized case review here.

Best of luck,

Law Guy

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The accuracy of information provided on this site is not guaranteed. It is generic information for informal purposes only. It is NOT formal legal advice. Before relying on any information found in this site you should consult with a licensed attorney in your state. If you are currently represented by an attorney you should strictly abide by his/her advice and counsel.

Is Settlement Money Taxable?

Comments for Is Settlement Money Taxable?

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Is Settlement Money Taxable?