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Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question and respond.
No, here because the award was for physical sickness or damages (the bladder cancer and other serious maladies after long-term use of the medication that manifested) this is not taxable.
Here's how IRS puits it in publication 4345:
"If you receive a settlement for personal physical injuries or physical sickness and did not take an itemized deduction for medical expenses related to the injury or sickness in prior years, the full amount is non-taxable. Do not include the settlement proceeds in your income."
According to the IRS, any lawsuit settlement proceeds that a court awards for physical illness or injury are non-taxable. This includes wrongful death settlements, since the damages are imposed due to a court’s finding that a third party is responsible for the physical illness or injury that resulted in death. To qualify for this exception, the settlement must be compensatory, meaning that it must be a form of compensation for the pain and suffering caused in the case.
No taxes here for this recovery here.
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