is a wrongful termination settlement taxable
According to Jeff Schnepper at moneycentral.msn.com (12/04/09), there must be a physical injury for the settlement to be free from tax. So, an award for wrongful termination would be taxable because there is no physical injury. In fact, there are two requirements to ensure a settlement (or a verdict) is tax-free. The first, as mentioned before, is that there must be a physical injury (which includes illness). Without physical injury, youâre paying taxes. The second is that the injury must have been caused by a wrongful act.