QUESTION
Do you have to pay state, local or federal taxes on funds from a personal injury lawsuit?
Asked on Oct 23rd, 2012 on Personal Injury - New Jersey
More details to this question:
I injured my knee in a restaurant fall and am in current litigation. There is an offer on the table. I would like to know if I do receive funds do I have to pay state, local or federal taxes on said fund.
16 ANSWERS
Criminal Defense Attorney serving Anderson, SC
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The David F. Stoddard Law Firm
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No.
Answered on May 21st, 2013 at 1:45 AM
Personal Injury Attorney serving Pacific, MO
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Melvin G. Franke
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No, it its for pain, suffering, disability etc and not for lost wages.
Answered on Oct 25th, 2012 at 5:04 PM
Automobile Accidents Attorney serving Newport Beach, CA
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Tomalas Law Firm
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In California an injury victim's net recovery (after accounting for attorney fees and other costs) from a personal injury claim are non-taxable.
Answered on Oct 25th, 2012 at 5:03 PM
Personal Injury Attorney serving Charlotte, NC
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Paul Whitfield and Associates P.A.
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Settlement funds for personal injuries are not taxable. Wages are.
Answered on Oct 25th, 2012 at 5:03 PM
Ronald A. Steinberg
Normally, the money you receive is to reimburse you for losses you suffered. Not being a gain, there would be no tax.
Answered on Oct 25th, 2012 at 5:03 PM
Yes you do. You should consult with an accountant for specific tax advice.
Answered on Oct 25th, 2012 at 5:03 PM
Chapter 7 Bankruptcy Attorney serving Syracuse, NY
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Andrew T. Velonis, P.C.
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No, it is not income, the same as if you crunched up the fender of your car and the insurance company paid you for the loss. You don't even report it.
Answered on Oct 25th, 2012 at 5:02 PM
Thomas Edward Gates
You only have to pay taxes on the amount you received for lost wages.
Answered on Oct 25th, 2012 at 5:02 PM
Employment Law Attorney serving Beverly Hills, CA
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Dordick Law Corporation
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Personal injury settlements are ordinarily tax free. However, technically, any portion paid for loss of earnings is supposed to be taxed. If it's a large enough monetary amount, you might want to allocate what the settlement is being paid for and get the smallest amount allocated to earnings so you only pay tax on that portion. I recommend that you speak to your accountant as most attorneys, unless they have a certification in tax, do not want to give advice on taxes.
Answered on Oct 25th, 2012 at 5:02 PM
Civil Litigation Attorney serving Aptos, CA
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Richard E. Damon, P.C.
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You are supposed to pay taxes on any part of the settlement that represents wage loss. Normally a settlement check is not categorized, and you can treat the entire amount as general damages (non-monetary losses) and you don't have to report this as income.
Answered on Oct 25th, 2012 at 5:02 PM
Automobile Negligence Attorney serving Orlando, FL
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Kelaher Law Offices, P.A.
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As of right now, the receipts from a personal injury settlement are not taxable.
Answered on Oct 25th, 2012 at 5:02 PM
Insurance Defense Litigation Attorney serving Auburn, CA
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Graves Law Offices
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If what you recover includes damages for lost wages, you must pay taxes on that portion. If the settlement agreement doesn't specify other than for personal injuries than it is not taxable.
Answered on Oct 25th, 2012 at 5:01 PM
Personal Injury Law Attorney serving Naperville, IL
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Law Office of Barry R. Rabovsky
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We would be happy to provide you with a free consultation if you call my office at either of the numbers listed below. If my office accepts your case, there is no fee charged unless we are able to obtain a settlement for you.
Answered on Oct 25th, 2012 at 5:01 PM
Plaintiff Animal Bites Attorney serving Missoula, MT
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Bulman Law Associates PLLC
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Maybe. Check with your tax consultant.
Answered on Oct 25th, 2012 at 5:01 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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No answer is possible without details, if you do not have an attorney, get one, both to review the proposed settlement and the tax issue. You many contract of a limited engagement, just paying a flat fee or hourly rate.
Answered on Oct 25th, 2012 at 5:01 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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Check with your CPA, but the answer is No.
Answered on Oct 25th, 2012 at 5:00 PM