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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13339
Experience:  15years with H & R Block. Divisional leader, Instructor
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Are a award of punitive damages taxable by the IRS?

Customer Question

Are a award of punitive damages taxable by the IRS?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Hello,

Punitive damages are taxable and should be reported as “Other Income” on line 21 of Form 1040, even if the punitive damages were received in a settlement for personal physical injuries or physical sickness.

Some settlement recipients may need to make estimated tax payments if they expect their tax to be $1,000 or more after subtracting credits & withholding. Information on estimated taxes can be found in IRS Publication 505, Tax Withholding and Estimated Tax, and in Form 1040-ES, Estimated Tax for Individuals.

Expert:  Robin D. replied 1 year ago.

Please advise if you need more information or rating in a positive way is acceptable.

Expert:  Robin D. replied 1 year ago.

If you require more information please advise.

Expert:  Robin D. replied 1 year ago.

I really enjoyed working with you – please feel free to request me again when you come back to ask another tax question.

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