Are class action settlements taxable as income in the United States?
In my case the settlement was a result of an insurance company lawsuit alleging that the insurance company overcharged its customers on a fee to its customers (including myself).
I'm thinking that this would effectively be a (forced) reimbursement. Am I correct in assuming that this event is not likely taxable?
It doesn't make a huge difference since the amount was under , but I am mostly just curious.
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No, it is not a reimbursement. Monetary awards, including punitive damages, are taxable. The only exception is when the damages are your health (physical injuries/illness). You either report them as taxable income, or reduce your basis in the property to which the award refers.
See this helpful publication from the IRS.
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