Nobody should ever have to go through being injured due to the careless or negligent actions of a medical professional. However, if you are going through a medical malpractice lawsuit, there are various factors that need to be taken into consideration. If you are expecting a settlement, you may wonder if any damages awarded are taxable. Our Pittsburgh medical malpractice lawyers review your legal medical malpractice settlement below.
Will Your Medical Malpractice Settlement Awards Be Taxed?
When you are going through injuries due to a medical mistake, the last thing you want to have to worry about is taxes. However, taxes are a part of most areas of our lives. When it comes to medical malpractice settlements, the Internal Revenue Service (IRS) classifies these as “personal physical injuries” or “physical sickness” settlements.
There are two basic ways in which a person will receive compensation for a personal injury or medical mistake. This includes a settlement with an insurance carrier or a verdict through a trial. In general, any compensation you receive in a settlement or jury verdict will not be taxable by the IRS. This includes economic costs covered by a settlement such as medical expenses, lost wages, and miscellaneous out-of-pocket expenses as well as non-economic damages awarded for emotional distress and mental anguish originating from the medical mistake.
The exception to this, according to the IRS website, is if you claimed deductions for medical expenses pertaining to the injuries involved in your medical malpractice case. If you have done this, a portion of your settlement or verdict may be taxable.
There are times when punitive damages are awarded in medical malpractice cases. Punitive damages or designed to punish a person who was grossly negligent or acted intentionally and caused harm to another person. These damages are also meant to deter others from acting in the same way. These damages, if awarded, are likely taxable as income.
Having a qualified Pittsburgh medical malpractice attorney by your side for these cases is vital. You should also consider speaking with a certified public accountant (CPA) or a tax attorney in the event you receive compensation for a medical malpractice case.
Let Us Help You With Your Case
If you or somebody you care about has been injured due to the careless or negligent actions of a medical professional, you may be entitled to significant compensation. At SMT Legal, we want to help make sure that you understand all aspects of these cases, including whether any of the following types of compensation you may receive are taxable:
- Compensation for all medical expenses related to the medical error
- Coverage of lost income and benefits if you cannot work
- Loss of enjoyment of life damages
- Pain and suffering damages
- Punitive damages against the healthcare provider or agency responsible
When you need a medical malpractice attorney in Pittsburgh, you can contact SMT Legal for a free consultation.