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JKCPA
JKCPA, CPA
Category: Tax
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Experience:  CPA with tax experience.
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ARE MEDICAL MALPRACTICE AWARDS TAXABLE

Customer Question

ARE MEDICAL MALPRACTICE AWARDS TAXABLE
Submitted: 5 years ago.
Category: Tax
Expert:  JKCPA replied 5 years ago.
Hello,

Thanks for your question.

This is generally non-taxable. However, if any of the award is classified as interest, loss of income or punitive damages, those portions of the award would be taxable.

Amounts awarded for treatment of emotional distress or mental anguish are also taxable to the extent that it exceeds medical costs, not previously deducted. In this case, a statement showing the entire settlement amount less related medical cost should be attached to the return.

 

Best regards,

 

 

 

 

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