Asked in InsuranceAuto InsuranceTaxes and Tax Preparation
Do you pay taxes on an auto insurance settlement?
May 14, 2010 2:29PM
I had a huge settlement from an auto insurance company and it was not taxed. However I believe that was because my attorney negotiated a type of settlement that made it non-taxable. I thnk it has to be considered "punitive damages" or something like that for it not to be taxed.
Update - Generally, amounts paid for personal injury and property damage are NOT taxable. Amounts paid for punitive damages and loss of income ARE taxable.