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Are injury insurance settlements taxable?

On Behalf of | May 14, 2024 | Firm News

Personal Injury settlements are usually tax-free. Generally speaking, your settlement will be tax-free if it is:

1. Compensation for physical injuries or physical sickness, and

2. Resulting from a tort (car accident, slip and fall accident, etc)

Injuries, pain and suffering, and emotional distress from auto accidents is ordinarily tax-free.

Of course, there are always exceptions. For example, punitive damages are not exempt and sometimes even a confidentiality clause in a personal injury settlement can be deemed to be taxable.

It is always wise to speak with your tax professional to know for sure whether your Personal Injury settlement is subject to income tax.

It is also wise to have a personal injury attorney help you with your injury claim and the settlement process to be sure specific language is included in an addendum to the release.

If you have been injured in a car accident or sustained a personal injury due to another’s negligence, contact Wes at Kocsis Law Office PC for a FREE injury consultation. Call Kocsis Law Office PC at 570-888-7709 or send an email to [email protected] to schedule your FREE consultation. Home and hospital visits are available if you are injured.

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