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.
IRS publications about back pay awards: See Chapter 13 of IRS Publication
17,Your Federal Income Tax.
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call Julian for a tax consultation click
here.
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For further information regarding IRS
rules and regulations and your particular tax or IRS situation you should
consult with a Certified Public Accountant, Enrolled Agent, Attorney, or
other tax advisor.
Your Federal Income Tax.
