Will I Have to Pay Taxes on My NYC Rideshare Accident Settlement?
For the most part, the damages paid to you to compensate for your property losses and injuries after an NYC rideshare accident are not taxable under federal or New York State law. However, this general rule is subject to exceptions.
You can minimize the tax impact when the settlement is properly structured to optimize your benefits. The New York City personal injury lawyers at Douglas and London represent victims of another party’s negligence, including rideshare passengers– to recover the largest available damages awards with no adverse tax effects. The key to avoiding tax problems is defining the basis of the settlement to coincide with tax code limits and exemptions.
What components of an NYC rideshare accident settlement are not taxable?
Settlements and jury awards in personal injury cases, including rideshare accidents, generally include compensation for these categories:
- both past and anticipated future medical expenses to treat injuries incurred in the accident
- costs of rehabilitation and occupational therapy
- replacement of salary and wages that an injured party did not receive when injuries prevented them from working
- compensation for pain and suffering, and other non-economic damages.
None of the above categories are taxable. To the fullest extent possible, your NYC Uber accident lawyer should verify that your rideshare accident settlement agreement specifies that all components of your damages are within them.
What rideshare accident damages might be taxable?
In all personal injury cases, only a few categories of damages will be subject to taxation:
- Punitive damages, which are awarded only where a negligent party’s conduct is intentional or egregious
- Compensation for non-physical or emotional injuries, e.g., where a rideshare passenger was not physically hurt but witnessed someone else’s serious injury
- Interest that accrues when damages are not immediately compensated or are paid over a period of time.
If any of these categories apply in your rideshare accident, your NYC Lyft accident lawyer will take extra precautions to verify that your settlement agreement includes a thorough and accurate description of how your damages award was calculated.
How do rideshare accident attorneys negotiate settlement terms and conditions with insurance companies?
Insurance companies have an incentive to settle rideshare accident claims quickly to limit the total damages that they will be obligated to pay. Those companies will often contact the injured passenger immediately after an accident to get a statement. Rideshare passengers unfamiliar with insurance company processes will often make comments or admissions that can later be used against them as they seek a larger damages award.
In addition to verifying that a settlement agreement defines damages, so taxes are not owed– an experienced attorney will handle all discussions with the rideshare driver’s insurance carriers. Your best opportunity to recover the largest available compensation is to retain an attorney who can shield you from insurance company overreach.
They will also make sure that your rideshare settlement includes reimbursement for all of your damages and not just the costs and expenses that you incurred immediately after your accident.
Contact us at Douglas and London for a free case evaluation
The property losses and injuries that you might suffer in an NYC rideshare accident should never be exacerbated by a taxation penalty. In every case, our team at Douglas and London will fight for the largest damages award that you deserve to recover. Please see our website or call our Manhattan offices to speak with one of our Uber or Lyft accident lawyers about filing your claim and recovering reimbursement for your losses and injuries. There are no upfront costs—we work on a contingency basis.