Legal Question in Personal Injury in California

if you win a lawsuit do you pay taxes on the money you get

Asked on 11/23/14, 5:30 pm

2 Answers from Attorneys

Armen Tashjian Law Offices of Armen M. Tashjian

Not on a personal injury case.

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Answered on 11/23/14, 7:40 pm
Timothy McCormick Haapala, Thompson & Abern, LLP

It depends on what the money is for. The money you win in a lawsuit is generally intended as a replacement for something. Whether the payment is taxable, depends on whether what it replaces would be taxable. So Mr. Tasjian is not quite correct. If lost wages are part of a personal injury pay-out, that part would be taxable. Likewise, if you sue for wrongful termination, you are suing primarily for lost wages. So that is taxed. Payment for pain and suffering is not taxed, nor is reimbursement for medical expenses.

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Answered on 11/24/14, 1:53 pm

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