Do You Have to Pay Taxes on a Personal Injury Settlement?
Video Transcript
Generally speaking, in Virginia, a personal injury settlement is not taxable. It’s more of a reimbursement for a loss. You, what you’ve done is you’ve been hurt, you’ve been harmed, you’ve gone through pain and trouble and suffering, and what this money serves to do is reimburse you for a loss. So it’s in most instances, not considered income. There are exceptions to that rule. Punitive damages, for example, are taxable, and the portion of your settlement that represents reimbursement for your lost wages, that can be considered taxable. If there are elements to your case that include possible taxable events, we recommend you consult with a tax professional.
