Yes, but I don't recommend it, depending on what kind of tax reporting document you get for it, come tax time. Generally, court settlements paid are reported on a 1099-MISC. Back pay is taxable. But if you pay tax on it in the current tax year that could increase your tax liability quite a bit for that current tax year. With back pay from previous years, you can amend that return and claim the back pay for that tax year on that amended return. If tax was not withheld from the settlement, then you'll pay taxes on it for that past year, and not affect your AGI for the current year.
So to answer your base question again, I say "YES", but I don't recommend it. Instead, you should seek the legal advice of a CPA in your local jurisdiction so that you can see what is best for your specific situation.
