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    Coley73's Avatar
    Coley73 Posts: 1, Reputation: 1
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    #1

    Dec 12, 2007, 08:30 PM
    Automobile Settlement( Is that taxable?)
    Do I have to claim money received from a settlement from an automobile accident, on my taxes.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Dec 12, 2007, 10:11 PM
    What does the settlement award say? A part of settlement may be taxable. If it is for damage of the vehicle, only settlement that exceeds the actual cost is taxable. If it is for loss of wages, it is taxable.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #3

    Dec 13, 2007, 09:23 AM
    Generally, if the settlement is compensatory (pays for damage), it is NOT taxable UNLESS it replaces taxable wages that were lost due to the accident.

    If the settlement was the result of a court case and includes PUNITIVE damages, then the punitive damages are also taxable.
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