Usually not taxable - however, you should consult you tax advisor
This is not intended to be legal advise or as legal representation. I am a California personal injury attorney . Be aware that every state has its own statute of limitations; and statutes & case laws that govern the handling of these matters.
You really need to get advise from a tax lawyer, CPA or other tax expert. Because the tax laws are constantly changing, it is generally not an area that most personal injury injury lawyers feel completely confident or qualified to answer. That being said, my general understanding is that if part of the settlement involves reimbursement for past or future lost income, that part is likely taxable. Reimbursement for medical expenses and for pain and suffering are generally not taxable.
A monetary recovery received from a car accident settlement is not treated at income by the IRS and thus it is not taxable.
Sam Levine, Esq.
Most (but not all) settlements are non-taxable. Run it by your CPA.
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