If you receive a settlement for personal physical injuries or physical sickness and did not take an itemized deduction for medical expenses related to the injury or sickness in prior years, the full amount is non-taxable. Do not include the settlement proceeds in your income.
It depends on how the payment was made. Generally, compensatory damages for a personal injury claim are not taxable unless you have taken medical expense deductions on previous returns. Punitive damages and damages other than personal injury cases are usually taxable. If you are not certain, asking the attorney is usually the best way to find out if the settlement was taxable or not.
If your settlement was taxable, you should receive a 1099-Misc. Issuers have until Jan 31 to send out documents, so you may still receive one if you have not already.