Do You Pay Taxes on Personal Injury Settlements?
*Please note that we are not tax attorneys or accountants. You should always consult with your tax professionals concerning your taxes.*
One of the biggest misconceptions about personal injury settlements is that you pay tax on them. The good news is you do not.
Your settlement money is triple tax-exempt, which means you don’t pay federal, state, or local income tax on them. That’s true even if your settlement includes lost wages which you’d normally pay tax on.