Hi, I'm from California. I have a doubt regarding the taxation of the compensation for my personal injury suit.
I fell on the slippery floor of a local grocery and sustained a hip injury which is going to put me out of work for a month or so. I will be suing the shopkeeper for not putting up a warning board on the slippery floor. I had a road accident three years back and sustained an unhealed neck ache, which came on and off. After a long time in therapy, the pain was kept at bay temporarily. However, after the fall, I began to experience an alleviated pain on my neck. I have the report from my doctor for my ache in the neck.
My question is would I be entitled to compensation for the secondary injury sustained, that is my alleviated neck pain? If so, is it taxable? Cause I read it in the blog of a law portal as such.
"Compensation received for emotional distress and mental anguish not directly related to physical injury or physical sickness is taxable. Defamation, invasion of privacy, discrimination, harassment, and wrongful termination would be examples of taxable money. Regardless of the type of case, punitive damages are generally taxable. Finally, a settlement award with compensation for lost wages or loss of income is taxable and must be reported on a tax return"
I don't know if it's the result of the fall or the mental trauma that has triggered my neck pain. I would like to get good compensation for my loss of income and mental stress.
Please share your knowledge on this.