Probably not.
1) It
depends on your facts and circumstances. If your lawsuit was for “personal physical injuries or physical sickness,” then
generally the settlement proceeds are not included in your income. An exception
applies when some of the proceeds are paid to reimburse you for medical
expenses that you deducted on your tax return. If the proceeds were not for
personal injuries, then some of it may be taxable to you.
https://www.bankrate.com/finance/taxes/is-settlement-proceed-taxable.aspx
2)"Physical"
is still the pivotal word when it comes to damages for emotional
issues. If your pain and suffering is the result of injury or
illness that gave rise to your lawsuit, the damages aren’t taxable. If
your lawsuit relates to something other than personal injury, such as
discrimination, defamation or an employment issue, the IRS will tax you on the
money at the percentage rate determined by the tax bracket you fall into when
adding in your other income. You’ll also have to pay Social Security and
Medicare taxes on the damages. If you’re negotiating a settlement with the
party you’ve sued, talk to your lawyer before you sign an agreement if your
case involves both physical and nonphysical claims. You’ll want to make sure that if your pain and suffering is
related to physical injuries or illness, this is clearly stated.
https://pocketsense.com/tax-implications-pain-suffering-settlements-11404881.html
