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Submitted By: someone
Answered: June 1, 2022 2:45 am
Answered: June 1, 2022 2:45 am
I received a wrongful death settlement following the death of my relative. Is this taxable to me or to her estate?
A wrongful death settlement of compensatory damages is nontaxable because it is the result of a claim arising from personal physical injury or illness. However, if the settlement includes punitive damages and/or interest, that portion of the settlement is taxable.
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Tax Glossary
Estimated tax
Advance payment of current tax liability based either on wage withholdings or installment payments of your estimated tax liability. To avoid penalties, you generally must pay to the IRS either 90% of your final tax liability, or either 100% or 110% of the prior year’s tax liability, depending on your adjusted gross income.
