Hi kknumber32012,
I found that ... Generally, federal and state law allow an exclusion from gross income for
settlement amounts, except for punitive damages, which result from personal
physical injuries or physical sickness. However, amounts awarded for emotional
distress must be included in gross income. In addition, in some cases federal
and state law require the settlement recipient to include attorney’s fees in their
gross income. This act specified that any amount received in settlement claims
including payments made from the PG&E trust to fire victims related to the 2015
Butte fire, 2017 North Bay fire, and 2018 Camp fire can be excluded from gross
income, for state purposes, for both Personal Income and Corporation
taxpayers. As this time the federal government does not offer
a similar benefit.
You can keep connected with changes thru this link:
PG&E Wildfire Settlement Payments
You can review this IRS link:
Tax Implications of Settlements and Judgments
Hope this helps. Thanks for asking.
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