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Do I Have to Pay Taxes on a Death Settlement ?

GLKUnder New York’s  laws, a wrongful death claim is a civil wrong or tort, which is remedied through the courts with payment of compensation or damages. The intention of the responsible party’s payment to the decedent’s estate is to right the wrong sustained.

But a very real question arises as to whether the settlement is taxable under the law. Generally speaking, there are no taxes to be paid on a personal injury settlement. In New York, compensation for personal injuries and pain and suffering is tax-free. This also includes any settlements received as part of a wrongful death settlement.

Exceptions to the Tax-Free Rule

However, there are a few exceptions to this tax-free rule for personal injury and wrongful death settlements, including:

  • Any portion of a settlement which was specifically designated as compensation for lost wages, will be taxable.
  • In a death case specifically, an award for pain and suffering is typically taxable to the estate. In certain cases, your  attorney may be able to legally allocate the monies to the “wrongful death” cause of action (which is not taxable to the estate).
  • And lastly, if you invested your personal injury settlement or your estate invested your wrongful death settlement proceeds in taxable investments, any profit or gain will be taxable.

Our attorneys will look at the specific facts of your case to make sure your settlement is properly structured so as to avoid or minimize any taxation that is not otherwise due.

Contact Us Today!

The attorneys at Gersowitz, Libo & Korek, P.C. have been helping accident victims and their loved ones recover maximum damages for years. We have the knowledge, experience and resources to aggressively pursue your case and help you get the outcome you deserve.

For more information or to schedule a complimentary consultation with one of our attorneys, call 800.529.9997.

We handle cases in New York and New Jersey.

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I am giving this law firm 6 out of six thumbs up. Very professional very personal and compassionate staff. From the Attorneys to the staff they were all...
Anthony C.
They were incredibly professional and pleasant to work with. They made the personal injury process straightforward and easy to navigate. I appreciated their...
Lindsay L.
Thank you to the team at Gersowitz Libo & Korek, and especially to our wonderful attorney Anthony Makarov. Mr. Makarov was our trial attorney who took our...
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Jeff and Michael are both very professional and helpful towards my case. I would like to thank the team and Irene, the assistant, for all their help despite the length of time that the case took. They took a lot of care and were patient with answering any inquiries that I had.read more
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La mejor firma de abogados, muy profesionales, excelentes persona, todo el tiempo estuvieron pendientes de mi y mis necesidades, estoy muy agradecida con ellos.
Maricela O.
I was injured in 2011 and spent nearly 8 years with Ed Gersowitz and Jeff Korek. Their professionalism and care was beyond. The process was long and at times exhausting but Ed. Jeff and their team made me feel comfortable and in great hands. I can't thank them enough and would highly recommend GLK to all. Thank you for all your help!read more
Jeremy N.
From beginning to end we were comfortable with the team at GLK. Thank you Mr. Gersowitz (Ed) for obtaining a settlement out of court.
Donna L. S.
A few years ago I was misdiagnosed and nearly ended up becoming a quadriplegic. Three spinal fusions followed. I asked my sister, a top D.C. lawyer, to find the name of the best personal injury lawyer in NYC, and I was referred to Jeff Korek of Gersowitz Libo and Korek. It was a tough time for me, but Jeff and Irene were great and helped me through it every step of the way. They were compassionate, understanding and very accommodating, yet professional and always with their fingers on the pulse. They really care about the welfare of their clients, and not just money driven. When I was unable to travel, Jeff came to me, and I live an hour from the city. This firm is well known, well established, and has earned the respect and credibility among its peers. I highly recommend the firm of Gersowitz Libo and Korek without hesitation and, in fact, I already have. My thanks go out to the entire team for a better than expected outcome!!! They get a 5 out of 5 stars from me!!read more
Mary S.
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