My husband had settled his workman's compensation case for future medication.
I am just wondering if this is taxable money. WC case was from California while he was working when we lived there. We have since moved to Iowa and had been here for 5 years. I have not files 2008 taxes yet. I need to know before I do so. Help!

Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act.