Do I have to pay tax on my back pay award?

Court awards or settlements are generally taxable on your tax return unless they are compensation for a personal injury.

Damages received after August 20, 1996 are tax free on your tax return only of they are paid for physical injury or sickness.

Amounts you are awarded in a settlement or judgment for back pay, including unpaid life insurance premiums and unpaid health insurance premiums, must be included in your tax return.

They should be reported to you by your employer as taxable income on Form W-2.

 Related tax information about back pay awards
Damages for Emotional Distress
Legal Fees
Legal Settlements
Income Related Questions and Answers
IRS publications about back pay awards:
See Chapter 13 of IRS Publication 17, Your Federal Income Tax.
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