Legal settlement
Answer:
Legal damages or compensation awarded on account of a physical injury or physical sickness such as in an auto accident, are non-taxable.
Awards for emotional distress attributable to a physical injury or sickness are also non-taxable.
Generally, punitive damages are taxable even if they relate to a physical injury or sickness. Speak to your local CPA about the taxability of the award you received.
Awards for emotional distress attributable to a physical injury or sickness are also non-taxable.
Generally, punitive damages are taxable even if they relate to a physical injury or sickness. Speak to your local CPA about the taxability of the award you received.
