Is a settlement for physical sickness taxable?

Erick
Erick Member Posts: 3 Newcomer
edited December 2024 in Situation & Life Changes

I received a settlement for personal physical sickness.

Where do I file that at on your FreeTaxUSA platform? Miscellaneous section? If not there, then where? I was told to use IRC Section 104(a)(2)

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  • MaryM
    MaryM FreeTaxUSA Agent Posts: 7
    Answer ✓

    Hello Erick,

    If your settlement was for physical sickness and you did not take an itemized deduction for medical expenses related to the injury or sickness in prior years, the settlement is non-taxable.

    The IRS provides more details on the taxability of settlements that may be helpful to review depending on all the details of the settlement. You can view that information here:

    https://www.irs.gov/pub/irs-pdf/p4345.pdf

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  • Erick
    Erick Member Posts: 3 Newcomer

    Thank you MaryM, for your prompt answer.

    I did not take an itemized deduction for medical expenses related to the injury or sickness in prior years.

    I will go to the link you provided and review any information there, that is related to the details of my settlement.

    Thanks again, Merry Christmas and Happy Holidays! 🤶🌲🎁

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