lexisnexis Lexis® Legal Advantage
  • Trends
  • Insights
  • Product Spotlight
  • Attorney Spotlight
  • Buy Now
  • Free Trial
  • -Lexis Legal Advantage FAQ
    • +Appellate Law
    • +Intellectual Property
    • +Labor & Employment
    • +Legal Tech
    • +Litigation
    • -Tax Law
      • Are Personal Injury Settlements Taxable?
      • Are Punitive Damages Tax Deductible?
      • Are Punitive Damages Taxable?
      • Are Settlements Taxed?
      • Do You Pay Taxes on a Settlement?
      • How is Cryptocurrency Taxed?
      • What is the Capital Gains Rate for Cryptocurrency?
  • -Lexis Legal Advantage FAQ
    • +Appellate Law
    • +Intellectual Property
    • +Labor & Employment
    • +Legal Tech
    • +Litigation
    • -Tax Law
      • Are Personal Injury Settlements Taxable?
      • Are Punitive Damages Tax Deductible?
      • Are Punitive Damages Taxable?
      • Are Settlements Taxed?
      • Do You Pay Taxes on a Settlement?
      • How is Cryptocurrency Taxed?
      • What is the Capital Gains Rate for Cryptocurrency?

Are Punitive Damages Tax Deductible?

There’s a two-part answer here, one from the defense perspective and the other from the plaintiff. On the defense...

Are Punitive Damages Tax Deductible?

There’s a two-part answer here, one from the defense perspective and the other from the plaintiff.

On the defense side, punitive damages paid are tax deductible. In regard to legal fees, those are typically considered a business expense and, as such, are deductible as well.

For the plaintiff, expect to pay taxes on 100 percent of the cash settlement award—there is no deduction for legal fees. Punitive damages and related interest are taxable.

  • Litigation
  • Punitive Damages
  • Tax Law
  • Taxation
  • Settlements
  • Share
  • History
  • More
  • Cancel
  • New
LexisNexis

For more information on LexisNexis products & services,
please call 800.458.9411.

privacy policy consumer access terms & conditions Cookie Policy Feedback FAQ
Copyright © LexisNexis
LexisNexis

Thank You!

Your subscription to our Lexis Legal Advantage Online Community is confirmed!

LexisNexis, a division of RELX Inc., takes your privacy seriously. As detailed in our Privacy Policy we will use your personal information to administer your account and provide the products and services that you are requesting.