
Generally, your personal injury settlement or award is non-taxable, and you do not have to report it on your tax return. The money you receive for your injury claim is meant to make you whole again or get you back as much as possible to where you were before the accident. Therefore, the money is not considered a gain that can be taxed.
There are a few exceptions where your recovery may be taxable. If you took itemized deductions for medical bills you incurred from treatment, then you will need to report the income on your tax return. Additionally, money recovered for lost wages or loss of earning capacity may be taxable, just as it is when you earn the wage under normal circumstances. Further, money attributable to emotional or mental distress may be taxable if the distress is not tied to any physical sickness and you incurred no medical bills to treat the distress. Lastly, punitive damages are taxable and must be reported.
You should always consult a Certified Public Accountant (CPA) or tax attorney when you are unsure whether your income from a personal injury settlement or award is taxable. Please also visit https://www.irs.gov/pub/irs-pdf/p4345.pdf for more information on this subject.
Contact the Utah Personal Injury Lawyers at Parker & McConkie Today
For more information, please contact an experienced personal injury lawyer at Parker & McConkie to schedule a free initial consultation today. We have 5 convenient locations in Utah, including Midvale, Salt Lake City, Ogden & Provo, UT. Clients can also visit our offices in Idaho Falls, ID & Rock Springs, WY.
We proudly serve Weber County, Utah County, Salt Lake County in Utah, Bonneville County in Idaho, Sweetwater County in Wyoming , and its surrounding areas:
Parker & McConkie Personal Injury Lawyers – Salt Lake City Office
466 S. 500 E., Suite 100,
Salt Lake City, UT 84102
(801) 851-1202
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Midvale Office
7090 Union Park Ave, #160,
Midvale, UT 84047
(801) 845-0440
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Ogden Office
2510 S Washington Blvd, Suite 160,
Ogden, UT 84401
(385) 402-8187
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Provo Office
37 E Center St, Suite 300,
Provo, UT 84606
(801) 876-4107
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Rock Springs Office
531 N Front St,
Rock Springs, WY 82901
(307) 205-7400
Hours: 24/7
Parker & McConkie Personal Injury Lawyers – Idaho Falls Office
2235 East 25th St. Suite #280,
Idaho Falls, ID 83404
(208) 418-0633
Hours: 24/7