Receiving a mesothelioma diagnosis is devastating, and not just because of the medical challenges. It is also because of the financial strain that it can bring. Fortunately, patients diagnosed with mesothelioma are entitled to file a lawsuit against the responsible parties to seek justice and compensation for asbestos exposure. One common question individuals pursuing compensation for mesothelioma ask is whether the settlement amount is subjected to taxation. Let’s explore the tax implications of mesothelioma settlements.
Are Mesothelioma Settlements Taxable?
The question of whether mesothelioma settlements are subject to taxation depends on the kind of damages awarded. However, according to Internal Revenue Service (IRS) rules, they are generally not taxed. This is because compensation for physical injuries or sickness is not taxable under federal law. Therefore, settlements or awards received for a mesothelioma diagnosis typically follow this rule.