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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Do you have to pay taxes on a law suit ...

Resolved Question:

Do you have to pay taxes on a law suit settlement.
Submitted: 9 years ago.
Category: Tax
Expert:  Ed Johnson replied 9 years ago.


This depends on what the law suit is for.

For example:

1. personal injury, not taxable

2. punative damages, taxable

3. compensatory damages may be taxable and might not be taxable, depending on the characther:

  • replaces lost wages, it is taxable
  • protects your wages and job, not-taxable.

4. EEOC law suits, generally not taxable.

Ed Johnson and other Tax Specialists are ready to help you