If you receive an award or settlement in your personal injury case, in most cases you won’t have to pay any taxes. Compensation, that is, money, from physical injuries or harm in a personal injury case are currently tax-free. The IRS looks at the monies you receive to compensate you for a physical injury or sickness as making you whole again. This compensation is currently not regarded as taxable “income.”
In some accident cases, you may be entitled to receive compensation for lost income or wages, which may be taxable. When your case settles or you receive monies from a verdict or award, you should discuss the tax consequences with your personal injury attorney.
If you have been hurt in an accident, don’t settle for less. Call us at 215-348-5455. Send an email to [email protected]. Consultations are always free. We are here to help.