Are Car Accident Settlements Taxed in New York State?
September 16th, 2019|
After you or a loved one has been injured in a car accident in New York State, you may have plenty of questions. Your immediate health is a priority, but after you’ve completed your insurance settlement negotiations, there are other concerns, too.
Your Car Accident Settlement
After an accident happens, it’s critical for you to file a police report and seek medical attention, even if you think you feel fine. The police report is important to determine who is at fault for the accident and can help in cases where you have a viable claim for an insurance settlement from the at-fault driver.
Medical attention is critical. Certain soft-tissue injuries may only show up with a professional diagnosis, such as whiplash, and left untreated, these can have lasting health effects. When you and your personal injury lawyer are pursuing your claim against the at-fault driver’s insurance company, you’ll need documentation about the injuries that you suffered.
Negotiations With Insurance Companies
Many insurance companies will offer you a fast settlement. If you have time lost from work due to not the accident, ongoing medical treatment for injuries from the crash, and extensive repairs needed for your vehicle, the quick settlement may not cover everything.
A personal injury attorney, such as William Mattar, can negotiate with an insurance company to do what they can ensure that you receive compensation after a crash. Don’t try to negotiate alone.
Are Auto Accident Settlements Taxable?
Many people wonder if they need to pay taxes on their insurance settlement, and aren’t sure what to do when it comes time to file taxes.
In the state of New York, whether or not your compensation is taxable is based on what the compensation is to cover. The most common things are lost wages, medical bills, pain and suffering, and attorney fees. When a settlement comes from a physical injury, the money received will not be subject to taxation. However, there are a few exceptions:
- Any punitive damages involved in the case may be subject to taxation.
- If interest is added on to your verdict, any interest you receive on the judgment money will be subject to taxes.
A consultation with the Law Offices of William Mattar can help you determine how much of your settlement to set aside for taxes, as wells determine the strength of your case. Give our car accident lawyers a call today to see how our expertise can help you.