Civil lawsuit restitution on a payday loan

[nickkatie]

I had taken out a payday loan, which I paid off.  The state of MN filed a civil suit against the company and I have received a restitution check. Since I had paid the load with taxed money, do I need to pay tax on this restitution?

[RichardG · Accepted solution]

It's likely the restitution was a refund of loan interest.  Since the interest is not deductible, you don't need to report the refund as income.