Do I have to pay income taxes on my personal injury settlement?
No. If you receive a settlement for a personal injury case, it is not income. A personal injury settlement makes up for a loss incurred.
For example, if your car is stolen, your insurance company gives you a check for the value of the car. The money you get from insurance for the stolen car is not taxable because it making up for the loss you sustained, the money the insurance company gives you is not “income.” The same would be true if your house is damaged during a storm. Any money you receive for repairs is not income to you.
By James Santner, Esq.
If you have questions about a similar situation, feel free to contact us. Consultations are free and there is no fee unless we win.