Labor & Industries Settlement

[user17722417543]

Hello,

I was injured at work by a third party who was not my employer. Several months later, the Washington State Department of Labor & Industries issued me a settlement check that they had negotiated on my behalf with the individual responsible for the accident.

Based on the information I have found, it appears that such settlements are generally not considered taxable income. Could you please confirm whether this settlement is subject to taxation?

Thank you for your assistance.

[MaxA1]

Correct.  Compensation for physical injuries or sickness is nontaxable, while compensation for damages, emotional distress, or non-physical injuries are considered taxable income.  See the following IRS link for more information on this:

• Tax implications of settlements and judgments