Is the money you receive from an insurance settlement taxable?

If you paid premium for insurance, then settlement is not taxable.
If you employer paid for your insurance, then it may be taxable.

Is the money you receive from an insurance settlement taxable?


If this was an auto accident the insurance settlement is non-taxable income.

Part of settement may be taxable depending upon:
1. Physical injuries or physical sickness settlements are generally non-taxable if you did not take an itemized deduction for medical expenses related to this injury in prior years.
2. Interest, punitive damages, emotional distress or mental anguish, and employment discrimination or injury to reputation settlements are generally taxable.
3. Loss-of-use or loss-in-value of property settlements may be taxable if the settlement exceeds your basis in the property.
Read Publication 4345. Settlements - Taxability.