Will i have to pay taxes on settlement

I retired at 55 and was guaranteed insurance from my company till I received Medicare at 65. At 60 years old. The company I worked for dropped all retired people insurance. I bought insurance for myself through Obama Care. Are union filed a grievance against the company and won the case. I'm now on Medicare. There is a small cash settlement for each person who lost there company insurance. Will I have to pay income tax on that cash settlement???

Employee Tax Expert

Jul 26, 2023 10:14:05 AM

Hi,

The general rule is that lawsuit settlements are taxable, except in cases that involve an actual, physical injury (“observable bodily harm”) or illness that you suffered. In other words: personal injury settlements usually aren't taxable, while other types of settlements usually are.

Here's an article that also helps!

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Regards,

Karen

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Will i have to pay taxes on settlement