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  1. #1
    Jan_al66 Guest

    Are lawsuit settlements taxable?

    undefinedWhat is the name of your state?
    I need to find out if a lawsuit settlement from a former employer is considered income and therefore taxable? I currently live in Kansas and sued a former employer in New York for sexual harrassment and wrongful termination of employment. The case did not go to court, I received a settlement. Thanks.
  2. #2
    Snipes5 is offline Senior Member
    Join Date
    Aug 2003
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    1,850
    It depends on how the settlement reads. It will also depend on how it is reported to you at the end of the year. Any amounts for "lost wages" are taxable. Other amounts may or may not be. Bring your court paperwork to a tax professional for a determination on your specific case, as each is different.

    Snipes
  3. #3
    abezon is offline Senior Member
    Join Date
    Aug 2002
    Location
    Washington
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    3,484
    Damages for physical injury & sickness are not taxable. Emotional distress is considered "physical injury" to the extent you pay for medical treatment/counseling. In other words, the settlement is probably taxable.
    This post does not constitute legal advice, nor does it create an attorney-client relationship. Postings are based only on the information provided and you should consult an attorney in your area before relying on information contained in this post.

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