Is a wrongful death settlement taxable? The attorney who settled my husbands death case against the county said the money was not taxable. I rec’d a 1099-MISC though?

[hbl3973 · Accepted solution]

Missy714,

Your attorney was very likely correct, but see, for example,

https://bloggerinterrupted.com/are-wrongful-death-settlements-taxable/

and

https://www.irs.gov/pub/irs-pdf/p4345.pdf

for any wrinkles that might have generated a 1099-MISC.

If the settlement is indeed exempt from tax, you will want to add a note to your tax return explaining why you didn't report the 1099-MISC as taxable income.  Or you can later deal with a nastygram letter from the IRS proposing additional tax due which could take quite a lot of time and effort to resolve.