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.
No. This type of settlement is not generally taxable.
You do not generally have to pay taxes on an insurance settlement claim. You can check with your tax firm or accountant for the rules specific to your state.
The auto insurance settlement wouldn't be taxable unless you realize a gain from it. Being on Social Security Disability doesn't exempt you from paying any taxes that may be due as a result.
A settlement is usually split into two parts, recovery of damages sustained, and pain/suffering (putative). For recovery of costs, the settlement is not taxed. For pain/suffering it is taxed.
No, the insurance settlement is considered compensation for a loss, not income.
Do I have to pay taxes on a discrimination settlement from a former employer
The insurance company would pay them directly to make sure they are paid.
You may have to pay capital gains taxes on a life insurance settlement in addition to any income taxes you might owe. Consult with a CPA or tax attorney to learn more about what tax consequences that a life insurance settlement may have.
In the USA you do not pay taxes on the Proceeds from an Insurance Claim.