I live in florida and my 14 year old daughter and I received separate Insurance checks as compensation from a car accident that we were in. The insurance company of the person who hit me is the one who sent us the checks. Do either of us have to pay taxes on this money or is it all ours?
Answer by Jay E
i don't know the laws in florida, but in texas as well as under federal laws, insurance settlements are not taxed.
Answer by Christopher Simon
No. Under Federal Treasury Regulation § 104(a)(2) Gross Income it says
"Section 104(a)(2) excludes from gross income the amount of any damages received (whether by suit or agreement) on account of personal injuries or sickness. The term "damages received (whether by suit or agreement)" means an amount received (other than workmen's compensation) through prosecution of a legal suit or action based upon tort or tort type rights, or through a settlement agreement entered into in lieu of such prosecution."
So unless some of the payment was for punitive damages. It will not be taxed
What do you think? Answer below!
Orignal From: Do i have to pay taxes on an injury compensation check?
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