As an experienced Personal Injury lawyer in South Florida, I have represented injured people from around the world who have been hurt on Carnival and Royal Caribbean cruise ships or when visiting one of Florida’s many theme parks, such as Disney World, Epcot, or Universal Studios. Frequently I am asked by my clients if their settlements are considered to be taxable income and whether or not they must report this money to the Internal Revenue Service.
Generally speaking, plaintiffs or claimants in personal injury cases do not need to report their settlements to the IRS, assuming that they take the entire proceeds at the time the case is resolved. However, if the proceeds are placed in an interest-bearing account, the interest or other income derived from that deposit would in fact be taxable.
There are a number of sophisticated tax-advantaged vehicles, such as special-needs trusts and annuities that protect the settlement proceeds in a special account that will minimize or defer tax consequences. However, I strongly believe it is always best to consult with an experienced tax attorney, as the IRS Code evolves continuously.
If you have been injured while cruising, in port, or on an excursion, please contact my office today for a free cruise accident consultation by calling 1-866-597-4529 or simply emailing me.