The majority of funds received from a personal injury claim are not taxable under state or federal laws. It will not matter whether you obtained the money from a settlement, jury verdict, or some other award. This is because the majority of funds associated with a personal injury claim are not taxable income. There are, however, exceptions. Money received for emotional distress or mental anguish that does not stem from a physical injury is income and is taxable. Another example of taxable funds would be money associated with a punitive damages claim. While most of the time any type of recovery from a personal injury claim will not be taxable, it is always best to discuss these issues with your attorney and/or accountant.
If you have questions about a personal injury claim and would like to speak with an attorney, contact Meyer, Puklich & Merriam for a free consultation at 952-444-9920. We are conveniently located in the southwest suburb of Eden Prairie near Minneapolis and serve not only the Twin Cities area, but the entire state of Minnesota.