Do I have to pay tax on my back pay award?
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| 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.
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| Related tax
information about back pay awards |
Tax Directory Topics:
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. Please read this IMPORTANT
Editor's Note regarding navigating IRS publications with Adobe
Acrobat
Reader.
IRS publications can also be ordered by calling 1-800-829-3676. |
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