Is a settlement check taxable income?

bouncingpigJune 15, 2004

We just settled a long lawsuit for a car wreck I was in 4 years ago. We received the payment yesterday. Anyway, I am not certain as to whether settlement checks are taxable. It is certainly not a gift and is supposed to be for not only pain and suffering but also to cover future medical expenses. I didn't think it was taxable, but DH thinks it may be. Anyone know? Thanks.

Brenda

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spewey

Generally not, though punitive judgements are taxable. This is really something to ask your attorney though, as we don't know the exact details of your settlement, and your own state tax code may assess judgements.

    Bookmark   June 15, 2004 at 12:18PM
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