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Great question! If your settlement is due to to physical injury or sickness, it is tax-free and does not need to be reported.
If any portion of your settlement was for lost wages, that will need to be reported and taxed. Your settlement documents should indicate what category the payment falls into, and it could be split. Some of the settlement might be taxable and a portion might be tax-free. I would check with a tax professional.
No answer given yet!
Great question! If your settlement is due to to physical injury or sickness, it is tax-free and does not need to be reported.
If any portion of your settlement was for lost wages, that will need to be reported and taxed. Your settlement documents should indicate what category the payment falls into, and it could be split. Some of the settlement might be taxable and a portion might be tax-free. I would check with a tax professional.
No answer given yet!
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