I received an award from US Victims of State Sponsored Terrorism Fund. My attorney received his 25% and I received my award. Is this money taxable?
I am curious to know if you were part of just round 2 of the distribution, and if you in fact received 5% of the 8.5 million judgement? Did you receive this payout right at the beginning of January? When were you notified what amount you were going to receive? Did the money go through an account set up by your attorney?
According to the United States Victims of State Sponsored Terrorism Fund, this money is paid out as compensatory damages for victims of terrorism. In a wrongful death case, the damages are caused by personal physical injuries, which the IRS does not tax. As MinhT responded above, this money isn't taxable. I'm sorry for your loss.
You're welcome. Yes, NY has the same rules relating to personal injury settlements.