Do I have to pay income taxes on my personal injury settlement?
February 9, 2005
Date: Fri, 21 Jan 2005
I was seriously injured on my job and won a settlement. They also have to pay my medical bills for the rest of my life. Do I have to pay income taxes for the award? It is for a physical injury.
Date: Mon, 31 Jan 2005
Nonpunitive damages and other amounts received for personal injuries are excluded from taxable income. (IRC Section 104(a)(2).) Punitive damages are taxable, even when they relate to a physical injury.
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