Under 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.