Will you owe taxes on your Jones Act settlement?
Is a settlement under the Jones Act or maritime law taxable? Generally no.
Under IRS Code § 104 there’s language that says any money you receive on account of a personal injury is not considered income to you during that year. What this means is that you receive a Jones Act settlement or a maritime settlement the money is most likely not going to be taxable to you. However, you want to insist in your settlement document that the company actually spells out and says that the money they are paying you in
However, you want to insist in your settlement documents that the company actually spells out and says that the settlement money they are paying you is under Section 104 of the Internal Revenue Code. We always protect our clients by making sure that this language is in their settlement documents.
This ensures that there’s no confusion when our clients file their taxes; they simply show the release to the accountant and say this money was under Section 104(c) on account of personal injury and it should not be taxable.
If you’re doing a Jones Act settlement, take care to make sure you talk to your attorney about this. He should know this type of information if he’s protecting your interests. Call us if you have any questions about whether or not money you may get through the Jones Act is going to be taxable to you.
Maritime accident attorney in New Orleans with over 20 years experience representing those injured at sea.