DO I HAVE TO PAY TAXES ON ANY RECOVERY I MAKE FOR A PERSONAL INJURY?

ANSWER: We always encourage people to consult a tax attorney if they have any concerns in this area, as we are not qualified to adequately advise people regarding tax issues. In general, one does not owe income taxes for recovery of money in a personal injury claim. The taxation rules are constantly changing, and the nature of the damages you recover may be taxable, especially if your claim includes allegations of lost income or punitive damages. Claims involving employment discrimination are treated differently, and some such recoveries and awards are taxable.