The majority of mesothelioma settlements are free of tax consequences
The taxation on mesothelioma settlements is quite complex and whether the sum of money you receive following a personal injury lawsuit is taxable will mostly depend on the type of compensation you are awarded. Since the majority of asbestos victims are eligible for general and special damages when it comes to financial compensation, they are not required to pay taxes on the money, as these forms of settlement are always free of tax consequences. In general, the financial help you receive for personal injuries, emotional distress, and medical expenses, as well as the settlement resulting from wrongful death lawsuits, is not taxable. Nevertheless, certain forms of compensation mesothelioma victims might be awarded after a lawsuit are taxable.
As previously stated, money awarded to mesothelioma victims in the form of general damages or special damages are tax-free. While general damages refer to compensation meant to cover the expenses arising from the illness, special damages have the purpose of compensating the plaintiff for their pain and suffering. Mesothelioma lawsuits usually fall into the category of personal injury cases, so most people will be awarded both general and special damages as compensation, which they will not have to pay taxes for.
However, victims of asbestos exposure may sometimes receive a form of compensation which is taxable. There are two types of taxable settlement individuals suffering from mesothelioma can be awarded:
- Punitive damages. Unlike general damages, this form of financial compensation is not aimed at covering the cost of your medical expenses. Punitive damages may be awarded to mesothelioma victims so as to hold the defendant liable for their negligence. Therefore, if you receive this form of compensation, you will have to report it as a source of income. It is worthy of note that in several U.S. states, punitive damages awarded to families in wrongful death lawsuits are free of tax consequences.
- Compensation for lost wages or profit. The second type of taxable settlement concerns compensation for lost wages or profit. Similarly, if you developed mesothelioma as a result of asbestos exposure and receive this form of compensation, you will have to report it on your taxes.
Have you of a family member been injured by occupational asbestos exposure? If so, it is crucial to know that asbestos victims are eligible for financial compensation. Our skilful lawyers have successfully pursued over 25,000 asbestos cases within the past 27 years and will gladly assist you as well. Whether you decided to take legal action or would just like to find out more about the process, please feel free to contact us at at (205) 328-9200 and we will promptly help you.