No. The net amount after you pay your attorney is gross income to you. Money received as a settlement of an employment-related lawsuit is usually designated in one of two ways; as lost wages, or as compensation for emotional distress resulting from the conduct of your former employer. Under the law, money attributed to either category is taxable. You need to discuss with your attorney how to structure the settlement and how the money will be allocated. See our site's page on taxation for further information.