sexual harassment settlement

[jmc]

Generally, settlement is taxable if it REPLACES taxable income.
If sexual harassment settlement received by an employee is taxable, how did it replace taxable income?

I think it's legal fee is eligible for above AGI deduction for unlawful discrimination. isn't it?

[jainen]

read the paperwork

>>settlement is taxable if it REPLACES taxable income<<

That's one category. Settlements are also taxable if they are for lost income, non-physical personal injury (like harassment), punitive damages, and other reasons.

>>legal fee is eligible for above AGI deduction for unlawful discrimination<<

Probably, but harassment is not necessarily a civil rights issue. Besides, what the plaintiff charges in the complaint is not necessarily what they ultimately agree to. You have to read the paperwork.

[jmc]

Thank you for your post. I could not find it from The National Labor Relations Act, either.