Is a personal injury settlement/award from an asbestos related injury taxable?

Asked over 1 year ago - Brentwood, NY

I am suing a company for cancer that I got from asbestos while I was a plumber. If I get any money by either settling or after a trial/jury verdict do I have to pay taxes on the money?

Attorney answers (11)

  1. Gregory Scott Gennarelli

    Pro

    Contributor Level 14

    14

    Lawyers agree

    Answered . An award for pain and suffering is tax exempt under the IRS code. However, should speak with your attorney and a tax advisor upon the resolution of your case (as well as a financial planner). Sorry to hear about your situation and good luck with the case.

    New York Plaintiff's Personal Injury Attorney Serving NYC, Long Island, Westchester and the surrounding areas.... more
  2. Yefim Rubinov

    Contributor Level 17

    12

    Lawyers agree

    Answered . No.

  3. Anthony A. Ferrante

    Pro

    Contributor Level 15

    11

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    Answered . No. The proceeds of a personal injury settlement are not taxable.

    The aforementioned opinion does not constitute legal advice and is for general educational purposes only. See an... more
  4. Christian K. Lassen II

    Pro

    Contributor Level 20

    11

    Lawyers agree

    Answered . Any pain and suffering portion of a settlement is not taxable. Any lost wage component is taxable.

  5. Alex R. Hess

    Contributor Level 12

    10

    Lawyers agree

    Answered . No - compensation in a personal injury case is not taxable income. Best of luck in your case!

  6. Joseph Gerard Dell

    Pro

    Contributor Level 10

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    Lawyers agree

    Answered . So long a the entire settlement is characterized as pain and suffering there is no tax consequence to you. If any portion is labeled lost income then it will be. Be sure to speak to you attorneys about your workers compensation claim and social security disability claims as well. Also if you were a union plumber you may be entitled to a disability pension from your union. But at the end of the case if its worded correctly you will never owe taxes on it.

  7. Sagi Shaked

    Pro

    Contributor Level 13

    8

    Lawyers agree

    Answered . You need to speak with a financial advisor to be safe. In general money for pain and suffering damages (non-economic damages) are not taxable. Money you receive for lost wages and/or loss of earning capacity from personal injury case is a taxable event.

    Sagi Shaked is a Florida Bar Board Certified Civil Trial Attorney. To schedule a free consultation, call (877)... more
  8. Robert Bruce Kopelson

    Contributor Level 20

    7

    Lawyers agree

    Answered . Talk to your atty and your cpa. While personal injury recoveries are not generally taxable, there could be some nuances that have yx implicaions. Talk to a tax atty, or other qualified tax advisor. I moved you question to the tax area.

  9. Jason Lloyd Stern

    Contributor Level 8

    3

    Lawyers agree

    Answered . No.

  10. Lars A. Lundeen

    Pro

    Contributor Level 20

    4

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    Answered . No, not under current IRS regulations. You should speak with your attorney about this issue.

    Legal Disclaimer:

    If this information has been helpful, please indicate below.

    Mr. Lundeen is licensed to practice law in Florida and Vermont. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that, if known, could significantly change the reply and make it unsuitable. Mr. Lundeen strongly advises the questioner to confer with an attorney in your state in order to ensure proper advice is received.

    This ans. does not create an attorney/client relationship.
  11. Stacy E Pepper

    Pro

    Contributor Level 13

    3

    Lawyers agree

    Answered . It depends on the terms of your settlement agreement and how the funds are categorized. Your attorney should know how to handle this for your best interest.

    Attorney Stacy E. Pepper is licensed in all State and Federal Courts in Mississippi. He is a founding Partner in... more

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