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Dose the irs take money from a settlement?

Miami, FL |
Attorney answers 7


No. A settlement for personal injury is not taxable.

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Although a personal injury settlement is not taxable, that does not mean the IRS or Department of Treasury cannot impose a lien upon it. Consult your attorney and discuss this issue.

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Personal injury settlements are usually not subject to federal income tax. However, if there is money paid for confidentiality this is taxable. There is a famous lawsuit involving basketball player, Dennis Rodman, that involved taxation related to confidentiality.

Samuel A. Coffey, Esq. ABRAMOWITZ, POMERANTZ & COFFEY, P.A. Belle Terre of Sunrise, Suite 101 7800 W. Oakland Park Boulevard Sunrise, FL 33351 Phone: (954) 572-7200 Fax: (954) 748-6488 Legal Disclaimer: If this information has been helpful, please indicate below. Sam Coffey is licensed to practice law in Florida. This response 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. Coffey strongly advises the questioner to confer with an attorney in your state in order to ensure proper advice is received.


Monies obtained by settlement or verdict as compensation for personal injuries is not taxable.


It depends. If a portion of the money was lost wages, that portion would be taxed, as it is income under the tax code.


In general, settlement proceeds are not taxable by the federal government. For your specific case, contact a Personal Injury Attorney.



When you are compensated for injury, pain or suffering you have not EARNED anything, therefor it is not income, thus not a taxable event. It is merely an attempt to replace something that was taken from you.

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