If I recieve a payout on a injury settlement is that taxable, if it all goes to covering medical?

Unicornz

If I was hit by a car while not having health insurance, and received a settlement from the driver's insurance, am I taxed on that settlement amount? Do I have to pay taxes on it before I use it to pay off the hospital bills?
Is the medical expense deductibles/credits enough to offset this?

JulieS

Hi,

There are many types of settlements and each one is treated differently for tax purposes. The following IRS link will provide more guidance on which types of settlements are taxable and which ones are not:

https://www.irs.gov/government-entities/tax-implications-of-settlements-and-judgments