Is a personal injury award taxable?

According to the federal income code, any damages received for personal physical injury or illness is not to be included in a taxpayer’s gross income, making that settlement or award exempt from federal taxes. Each state in the country also follows this rule. However, punitive damages are not included in this rule and any punitive damages awarded are taxable.

Eric K. Washburn
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Personal Injury & Wrongful Death Lawyer Serving Va Beach, Norfolk, Chesapeake & all of Virginia