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Do I have to pay taxes on a settlement check?

Port Saint Lucie, FL |

I was fired after telling my boss I was 5 months pregnant. I sued them and we ended settling out of court. Do I have tp pay taxes on that check?

Attorney Answers 2

Posted

Typically the answer is NO - because the damages you received were given in an effort to make you whole - you did not earn anything. Since it is NOT income - there is nothing to tax.

Because your case dealt with discrimination, however, i would defer to anyone in that practice area.

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Posted

This is a federal tax question and given recent developments you should consult a tax attorney. the basic gist of the law is as follows:
1. A party with an employment generally has to report the settlement as income
2. You may then claim a deduction for attorney fees.
3. Some of what you are awarded are wages, which is directly taxable.

Consult a tax professions regarding this question. For employment cases, it is very different than it is for personal injury cases.

NOTE: This answer is made available by an attorney licensed to practice in the state of California. The communication is intended for educational purposes only. By using or participating in this site you understand that there is no attorney client privilege between you and the attorney responding.

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