Firm Videos
Are personal injury settlements taxable?
As a New York resident, if you receive a personal injury settlement, you do not owe any taxes on that settlement. No state taxes, no federal taxes. And that’s because the personal injury settlement is considered to be compensatory damages or money to make you whole. Money to replace money you lost or will lose. Money to compensate you for past and future pain and suffering. The only type of compensation from a personal injury lawsuit that could be taxable are punitive damages, and those are very rare. But for the most part, personal injury settlements are not taxable in New York State.
