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Beka1276
Level 1
November 16, 2022
Question

Settlement from car wreck

  • November 16, 2022
  • 1 reply
  • 11 views

I received a settlement from a car wreck I was in from 2017. I didn’t receive anything for lost wages. Will I need to pay taxes on the settlement?

    1 reply

    Loretta P
    Employee Tax Expert
    Loretta PEmployee Tax Expert
    Employee Tax Expert
    November 17, 2022

    Lawsuit settlements may or may not be taxable.  Settlements may be taxable in part.  So much depends upon the nature of the injury and how the settlement was constructed.

     

    You may or may not be provided with IRS forms to report taxable income.

     

    This IRS FAQ provides a good overview of this issue.

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