A common question after settling is how much of it you keep. The general rule is favorable, with some nuances.
Compensation for Physical Injury
Damages for physical injuries and related medical costs are generally not taxable income under federal law, and Maine generally follows suit.
Potential Exceptions
Interest, certain punitive damages, and amounts for lost wages in some contexts can be treated differently. The structure of a settlement matters.
Get Tax Advice
Because situations vary, confirm the tax treatment of your specific settlement with a tax professional before relying on any general rule.
Have questions about your own situation? Get a free, confidential case review. You pay no fee unless you win. Call 973-566-5599.
This article is for general informational purposes only and is not legal advice. For guidance on your specific situation, consult a licensed Maine attorney.