If you are entitled to financial compensation because you or a loved one were the victims of a personal injury incident, you may be wondering whether the financial compensation you are awarded will be considered taxable income.
Settlements resulting from personal injury litigation are usually not taxed by the IRS, which means that victims may receive the full amount of compensation after the sum is agreed upon during negotiations or as the result of a trial. Depending on the nature of the awarded amount, however, there are certain exceptions to personal injury settlements in New York that are subject to taxation.
Depending on the nature of the personal injury, you may or may not be subject to taxation on your settlement. If you are unsure how to approach your upcoming personal injury case or settlement to prepare for related taxes, your best option is to speak with an experienced New York personal injury attorney who can answer all of your legal questions.
Non-Taxable Personal Injury Settlements in New York
The financial settlements that are obtained regarding personal injury matters serve to compensate injured victims for a number of ways in which they have been damaged. The following types of compensation are generally not taxable:
- Pain and suffering
- Lost wages
- Medical bills and other expenses
- Doctor’s visits
- Hospital stays
- Surgical costs
- Medication
- Physical therapy
- Emotional distress caused by a physical injury
Taxable Personal Injury Settlements in New York
Although cases that involve personal injury-related settlements are often exempt from taxation, some personal injury cases involve other damages that may be subject to taxation, including:
- Punitive damages
- Emotional injury unrelated to a physical injury
- Breach of contract
- Interest accrued on a Judgment
As a general rule for personal injury cases in New York, damages related to physically sustained injuries are more likely to be tax-exempt; while damages that are not related to a physical injury, such as emotional damage, are more likely to be taxable. If you are still unsure whether or not your personal injury settlement will be taxed, an experienced attorney can help.
Why Should You Work with the Personal Injury Attorneys at Lever & Ecker, PLLC?
Pursuing a personal injury claim of any kind can be overwhelming. Filing claims, contacting insurance companies, gathering evidence, and building a case can be exhausting if you are doing it alone. By retaining the services of experienced New York personal injury attorneys, you give yourself an advantage in court when it comes to pursuing your claim.
Our award-winning firm has been recognized by national organizations, including Super Lawyers and The National Trial Lawyers: Top 100. We pride ourselves on ensuring that our clients leave feeling satisfied and secure about their cases.
The team at Lever & Ecker, PLLC has worked side by side with personal injury clients all over New York since 1990, ensuring that their rights are protected, and their compensation is secured. Our attorneys understand how important it is that our clients who have experienced personal injury accidents receive the highest level of compensation possible, and we will work with you to strengthen your claim and ensure that you receive the help you need.
Whether or not you believe your personal injury case is severe enough to warrant a lawsuit, you should still speak with one of our legal professionals about the incident and obtain relevant legal advice from an attorney who has years of experience with similar cases.
Contact a Trusted Personal Injury Attorney in New York
Each personal injury case requires dedicated time and attention, which is why the team of legal professionals at Lever & Ecker, PLLC provides clients with the personalized attention they deserve. We have served our community for over thirty years and worked with thousands of clients to help them obtain the compensation they are entitled to by law after suffering due to negligence.
To speak with one of our experienced New York attorneys, call us at (914) 288-9191 or 718-933-3632. You can also reach out to us online to schedule your consultation today.
