Most most likely no: Any cash within the payment that's attributed to harm in your car or different individual estate isn't viewed sales from the IRS. The identical is right for compensation for clinical bills, or damages related to anguish and agony (phase 104 of the federal tax code). This is viewed go back of capital that brings you to a degree earlier in your coincidence. However, if there may be any section of your payment that's viewed punitive damages, or compensation for misplaced sales, then that component is taxable. Punitive damages are the ones now not related to any loss or damage, however alternatively supposed to "punish" the opposite celebration. These might were stipulated within the payment. Since it is a payment, and a as a substitute small one, it's particularly not likely that any of the payment is viewed punitive damages, nevertheless there may be continuously a hazard you had been reimbursed for misplaced sales, so determine that out. But absolutely your settlment isn't taxable, despite the fact that it must be stated to your tax go back (ask your accountant).