Are Wrongful Death Settlements Taxable in Louisiana?

If you’ve lost a loved one due to someone else’s negligence, you deserve the right to seek justice and compensation for your losses through a personal injury wrongful death claim. Pursuing legal action can be challenging, but a New Orleans wrongful death lawyer can fight for you in settlement negotiations or a court of law. 

If you do receive a wrongful death settlement, one key concern you’ll need to deal with afterward is the tax implications of that financial relief. While some parts of personal injury compensation are taxed, others are not. Keep reading to learn more. 

Key Takeaways

• Compensation being “taxable” means you will need to pay taxes on that money.
• In general, compensation for physical injury are tax-free, but compensation for punitive damages, lost income, and non-physical injury damages are generally taxed.
• Wrongful death compensation is not typically considered taxable income in Louisiana.
• For ultimate guidance on your tax liability, you should consult a tax professional.
• Surviving family members should get help from a capable New Orleans personal injury attorney with experience handling wrongful death cases.

Are Personal Injury Settlements Taxable?

If you receive a personal injury settlement after losing a loved one, you may owe taxes to the government for some parts of that compensation. This is based on whether or not the compensation is considered gross income by the Internal Revenue Service (IRS). Taxable and non-taxable compensation for personal injury is categorized as follows.

Tax-Free

Compensation for physical harm is generally tax-free, including:

• Medical expenses, unless they were deducted in a prior year
• Lost wages, unless they were deducted in a prior year
• Pain and suffering
• Emotional distress caused by personal physical injury

Taxable

Settlement money paid to make up for what would have been taxable income, or 

• Punitive damages
• Pre- or post-judgment interest
• Expenses you deducted in a prior year, such as medical expense deductions
• Non-physical injury damages, including emotional distress unrelated to physical harm

Is Wrongful Death Taxable in Louisiana?

If you’re reading this after losing a loved one due to someone else’s negligence, you’re probably wondering how wrongful death settlements relate to all this. Because wrongful death compensation is not meant to replace taxed income or serve as punishment, most wrongful death settlements are typically tax-free. This includes compensation for medical expenses incurred before death.

However, there may be some parts of the financial relief for your personal injury claim that are taxed. For ultimate guidance on your tax situation after a wrongful death personal injury case, you should consult with an experienced tax professional. It may be worth considering the tax consequences and advantages of certain tax deductions.

If you plan on seeking settlement money for wrongful death, you should get help from a wrongful death lawyer. An attorney can gather evidence, build a strong case, and represent your best interests.

Get Compensation for Wrongful Death With Cardone Law Firm

If you’ve lost a loved one, we understand that nothing can truly make up for the suffering you’ve faced. Still, getting a settlement agreement can help cover your expenses and lost support, while helping bring a sense of justice and closure. 

As if the emotional suffering caused by wrongful death accidents weren’t enough, these cases also often involve high medical bills before and considerable financial strain after a loved one’s passing. If you have a claim stemming from a wrongful death case, you can count on the team at Cardone Law Firm to do what it takes to get you whatever compensation you may deserve. Our New Orleans wrongful death attorneys are ready to stand up for your rights.

Whether you’ve lost a loved one or suffered a physical injury, you can count on Cliff Cardone to fight tirelessly for justice and compensation.