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ARE MEDICAL MALPRACTICE AWARDS TAXABLE

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ARE MEDICAL MALPRACTICE AWARDS TAXABLE
Submitted: 6 years ago.Category: Tax
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Answered in 1 hour by:
4/17/2011
Tax Professional: JKCPA, CPA replied 6 years ago
JKCPA
JKCPA, CPA
Category: Tax
Satisfied Customers: 5,884
Experience: CPA with tax experience.
Verified
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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