Personal Injury Settlements Taxable in Florida?
By Miami Personal Injury Lawyer Alex Perkins
The Short Answer: No
At Perkins Personal Injury Lawyers, once we settle a case for our deserving clients, a common question they ask is, “Do I have to pay taxes on this personal injury settlement?”
As the old saying goes, “there is nothing certain in this world except death and taxes”. But not for personal injury settlements! Now that personal injury lawyer is your new best friend after telling you this great news, comes the second part of the answer to the question—your lawyer will give the caveat but you need to check with your accountant because personal injury lawyers cannot give tax advice.
So, while personal injury settlement money paid for economic or non-economic damages after some type of accident or injury caused by the fault or intention of someone else are generally not taxable in Florida, we must emphasize that we are not accountants and cannot provide accounting advice. Lawyers have to say this unless they are a tax lawyer or licensed accountant. This information reflects Florida bar guidelines. PI lawyers will always recommend consulting a tax advisor to confirm your specific situation. Below, we’ll explain why personal injury settlements are generally not taxable in Florida, provide a clear example, and share how Perkins Law Offices can support you with our dedicated, client-focused approach if you are ever seriously injured in an accident.
Why Personal Injury Settlements Are Not Taxable in Florida
According to the Internal Revenue Service (IRS) and supported by legal principles outlined in resources like the Florida Bar, personal injury settlements are generally not considered taxable income under federal and Florida law. The primary reason is that these settlements are compensatory, meaning they aim to restore what was lost due to an injury, rather than provide a financial gain. The IRS, under Section 104(a)(2) of the Internal Revenue Code, excludes from taxable income any damages received (whether by settlement or judgment) on account of personal physical injuries or physical sickness. Florida, which does not impose a state income tax, aligns with this federal guideline, ensuring that personal injury settlements remain non-taxable at the state level as well.
Here’s why this matters: When you receive a settlement for a personal injury—such as medical expenses, pain and suffering, or lost wages due to a car accident, slip and fall, or other incident—these funds are intended to compensate for your losses, not to generate profit. The IRS and Florida law recognize this distinction, so these amounts are typically not treated as taxable income.
Example: Imagine Jane, a Florida resident, is injured in a car accident caused by a negligent driver. She suffers a broken leg, incurs $20,000 in medical bills, and misses work, losing $10,000 in wages. After pursuing a claim, Jane receives a $50,000 settlement, which includes compensation for her medical costs, lost wages, and pain and suffering. Under IRS rules and Florida law, this settlement is not taxable because it compensates for her physical injuries and related losses. However, if Jane’s settlement included punitive damages (meant to punish the at-fault party rather than compensate for losses), those specific amounts could be taxable. This tax-exempt status provides peace of mind, allowing you to focus on recovery without worrying about a tax bill on your settlement.
How Perkins Law Offices Can Help You
At Perkins Law Offices, we’ve been fighting for injury victims across Florida for over 25 years, and we’re passionate about delivering results with a client-centric approach that’s both professional and approachable. Our practice areas cover a wide range of personal injury cases, including:
- Car Accidents: From fender benders to serious collisions, we hold negligent drivers accountable.
- Slip and Falls: We help clients injured on unsafe properties get the compensation they deserve from at fault owners and operators of the premises.
- Cruise Ship Injury Litigation: Florida is a hub for cruise lines, and we focus on representing passengers injured on cruise ships, navigating the complex maritime laws to secure justice.
- Medical Malpractice: When healthcare providers fail to meet standards, we step in to protect your rights.
- Wrongful Death: We provide compassionate representation for families who have lost loved ones due to negligence.
What sets us apart? Our client-centric approach means we treat you like family, not just a case number. We listen, we strategize, and we fight tirelessly to maximize your compensation—whether through skilled negotiations or aggressive courtroom advocacy. With 25 years of experience, we’ve honed a process that’s both caring and fierce.
When personal injury lawyers tell their clients the that personal injury settlement money is generally not taxable, if they didn’t already think they were the best Personal Injury Lawyer already for getting them money, they do now. People shopping for a good lawyer can check out our real reviews where clients leave testimonials about Alex Perkins and the team at Perkins Law Offices.https://www.perkinslawoffices.com/testimonials/
Are Personal Injury Settlements Taxable in Florida?
Why Choose Perkins Law Offices?
Located in the heart of Florida, Perkins Law Offices is your trusted partner for personal injury claims. We understand the physical, emotional, and financial toll an injury can take, and we’re here to guide you every step of the way. Whether you’re dealing with a cruise ship mishap at sea in international waters or a slip and fall in Orlando, our team is ready to dive in with expertise and a touch of personality to make the legal process as smooth as possible.
Ready to learn more? Visit us at perkinslawoffices.com or call today for a free consultation. Let us put our 25 years of experience to work for you, ensuring your settlement is not only fair but also protected under Florida’s tax laws. And don’t forget—check with your tax advisor to confirm your settlement’s tax status. At Perkins Law Offices, we’ve got your back, so you can focus on healing and moving forward!
Alexander J. Perkins, Esq.
Attorney at Law
Perkins Law Offices
1728 Coral Way
Suite 702
Miami, FL 33145
305-741-5297
Cruise Ship Injury | Car Accidents | Wrongful Death
