Where to enter non-taxable medical settlement when preparing return

BookerFin2025
Member Posts: 2 Newcomer
Medical settlements are non taxable. Where /how are they entered? The settlement is the money that was used to live because injury resulted in disability and inability to earn income. The IRS needs to see how I afforded to live for the year. I lived off the settlement. How and where do I show this and enter the settlement amounts in preparing my return.
0
Best Answer
-
Hi BookerFin2025,
When you have a nontaxable settlement that is exempt from taxation, it is NOT reported anywhere on your tax return. A tax return only reports taxable income. The IRS's job is to collect taxes.
For more information see this IRS FAQ on Tax implications of settlements and judgments.
0