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I am on disability from the effects of AML leukemia. I work

Customer Question
one day a week and...
I am on disability from the effects of AML leukemia. I work one day a week and collect disability and have Medicare and the VA for prescriptions and primary care. (Contingent on low income).
I have been involved in a tort lawsuit regarding a solvent used in my trade that may have contributed to my sickness. Last October I received a partial settlement payment from one defendant (50k) and expect a larger amount later this year from others.
My question is this, does this settlement constitute income and is it taxable?
My concern is that I require my VA benefits while I await the entirety of the settlement and fear that this settlement if considered income could jeopardize that coverage.
Thank you for your time.
Submitted: 1 year ago.Category: Tax
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Answered in 16 minutes by:
3/8/2016
Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,239
Experience: Extensive Experience with Tax, Financial & Estate Issues
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Personal injury lawsuit recoveries are not taxable.

Unless there is some other basis for the settlement, other than based upon your claim, there should be no income tax on any related settlement you receive as a result of the lawsuit you brought to compensate you in some small way for your illness.

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Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago

Just checking in. I see you have had a chance to read my response to your question.

Do you have any follow-up questions?

If not, please remember to rate my response as that is the only way we receive credit for our work.

Thanks very much,

Steve G.

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Category: Tax
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