Recoverable noneconomic damages include awards for pain and suffering, emotional distress, and punitive or exemplary damages. Although some states have placed limits on the amount of noneconomic damages recoverable in products liability cases, these limits have in some instances been declared unconstitutional. Punitive damages are intended not to compensate the victim for losses but to punish the defendant's conduct. Although punitive damage awards get a lot of media attention, they are in fact quite rare and are more common in business litigation. The amount of punitive damages is usually based on the wealth of the defendant and the reprehensibility of its conduct.
Some states require that a portion of the punitive damages awarded be paid to the state.
Whereas compensatory damages are not taxable to the plaintiff, the amount of punitive damages that he or she receives is subject to federal income tax.