Hi
We just agreed on a settlement for a personal injury settlement that is also inclusive of PIP ( personal injury protection lien that is to be repaid to my insurance company). I was involved in an accident and suffered physical and emotional injuries. Right now, I have only a one line email stating the settlement . The release is for the full amount $125K . "The plantiff will accept, and defendant will pay the sum of $100K settlement is inclusive of PIP ( $25K) and all other liens in full settlement of all claims in this case. " PIP is part of my auto insurance coverage which pays for all my medical expenses related to the accident. For the last two years they have been paying all my medical expenses. I will need to pay my auto insurance back the $25K. I really only get to keep $100K.
Is the $100K and 25K PIP lien portion taxable? What information do I need to obtain from my lawyers for tax purposes and to insure its not taxable? What tax form should they be providing me? My lawyers are not 'accountants' or into the detail and I'm concerned. How would I report this on my tax return.
If I had obtained as part of the settlement , monies for future care ( ie. medical expenses) would this be taxable?
Thank you for your help
Mary
