Are personal injury settlements taxable?

Mine was injury due to emotional distress and name-calling.
Answers:
I am pretty sure that is taxable but have not read the rule on this for awhile.

If I withdraw correctly, personal injury settlements that are non-punitive are non-taxable. Punitive damages are taxable and emotional distress is always taxable.

I may hold this all backwards though.
Katrina these people who enjoy answered this question have misled you. According to the export tax laws personal injury settlements are not considered income and are not taxable. If you would like to verify this budge to www.irs.gov or go to www.legalzoom.com and you will see that I have answered your interrogate correctly.
The punitive part and the emotional distress constituent of the settlement are taxable income on your tax return. Personal injury (non-punitive part) is not taxable. Source(s): IRS Publication 4345 (Rev. 6-2006)
Catalog Number 38586D
Emotional distress is taxable.

Murphy was overturned.


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