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Home  >  Articles  >  Is My Settlement Taxable?

Is My Settlement Taxable?

For many claimants, the compensation awards or settlement amounts gained from a successful lawsuit are necessary to keep them financially stable. However, the benefits of a malpractice claim may be significantly lessened if the government taxes these sums. According to the federal tax code, there are only certain circumstances when a person’s lawsuit compensation may be taxed.

Contact the New Jersey medical malpractice lawyers of Levinson Axelrod, P.A., by calling 800-346-5529 for more information regarding your claim if you have been injured by a negligent doctor.

Malpractice Compensation and Taxes

When a person receives a sum as compensation for a medical malpractice suit, taxes generally do not affect that money. As these sums serve to repay individuals for money they have already spent or lost due to an injury, the government does not typically deduct from a compensation fund. The following types of compensation are covered by this non-taxable status:

  • Injury compensation
  • Compensation for medical bills
  • Compensation for emotional distress
  • Compensation for lost wages
  • Compensation for loss of consortium

These awards and settlements are not taxed by the government, regardless of the type of payment method. This means that neither lump sums nor structured payments will be taxed.

Contact Us

If a medical professional has caused you or someone you love harm due to reckless behavior, there may be legal action available. To learn more about your rights and options as an injured patient, contact the New Jersey medical malpractice attorneys of Levinson Axelrod, P.A., at 800-346-5529 today.