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TexLaw, Lawyer
Category: Employment Law
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Experience:  Contracts, Wrongful termination and discrimination
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Is the payment of a settlement agreement taxable for the Company

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Is the payment of a settlement agreement taxable for the Company paying the settlement and the person receiving the settlement?

Thank you for your question.

Whether the settlement is taxable depends on what is being settled. Payments to compensate a person for personal injuries are not taxable. However, payments to compensate a person for wages of any type are taxable.

What is the settlement for?

In regards XXXXX XXXXX the payment is taxable to the Company, I'm not quite sure what you mean. Do you mean does the company have to withhold tax?
Customer: replied 3 years ago.

The settlement is for the assignment of intellectual property

Thanks. This sort of settlement will be taxable as income to the claimant.

The Company itself may be able to write the amount off as a business expense if it is to purchase intellectual property that it was using in the regular course of business.

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Best Regards,
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