tax able

pat116 · ‎October 25, 2023

is money from a class action taxable

SwapnaM · ‎October 25, 2023

@pat116 Thanks for the Question!!

The nature of a class action suit determines if the lawsuit settlement can be taxable. Lawsuit settlement proceeds are taxable in situations where the lawsuit is not involved with physical harm, discrimination of any kind, loss of income, or devaluation of an investment. Damages received for non-physical injury such as emotional distress, defamation and humiliation, are generally includable in gross income but are not subject to Federal employment taxes.

Are legal settlements taxable?

Where do I enter an award from a taxable legal settlement?

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