Do I have to pay taxes on lawsuit settlement award?
Question Details:
I was awarded a settlement for a class action lawsuit against a birth control patch. I suffered physical injuries from the medication.
Business Law Answers
This is a tax question that should be asked to your c.p.a. or person that does your taxes.
For free information on Texas personal injury claims, visit http:www.kiplawfirm.com
Internal Revenue Code §61 (a) includes in gross income “all income from whatever source derived” unless excluded by a specific provision of the Code.
Internal Revenue Code §104 (a)(2) excludes from gross “amount of any damages received (whether by suit or agreement and whether as lump sum or as periodic payments) on account of personal physical injuries or physical sickness”.
So, it probably will be non-taxable income. Just confirm this with your accountant.
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