Thursday, February 25, 2010

Texas Tax Mesothelioma Settlements

Some states have struggled to determine if they should charge recipients of mesothelioma settlement cases and lawsuits a tax on these funds. Texas has an upper hand on making this determination.

Thousands of people file claims each year to receive compensation from a shrinking mesothelioma trust fund. The fund was established to compensate victims of the deadly cancer who acquired it through the exposure to asbestos. Now that payments are finally coming in for some of the victims they are able to pay their mesothelioma lawyers. Texas lawyers receive a compensation only if and when the victim receives their payment. As the 2010 tax season approached, many of these families need to know if their compensations packages are taxable for Texas tax purposes.

For most families, the funds come in at a time in the economy when there are many uses for the unexpected income. Sometimes the asbestoses settlement is used to fund medical expenses not covered under the victims' health insurance coverage. In some cases, the insurance may have excluded all related medical expenses stemming from the asbestos exposure. In these instances, the family does not need the extra worry of whether or not they must pay taxes from the compensation.
Texas State Income Tax

Thankfully, Texas has no income tax for any income received in Texas. It is a state that proudly receives its revenue from sources other than their citizens hard work. The asbestosis attorney can give you specific advice and may even provide it free of charge in these instances, but it is safe to assume, if you live in Texas you will not have to turn over any of your lung cancer or mesothelioma settlement or lawsuit payments to the State of Texas.
What About Federal Income Tax?

The United States Internal Revenue Service does count punitive damage lawsuit awards and settlement agreements as income for federal tax purposes. These amounts, generally speaking, must be declared to the federal government and taxes paid on all or a portion of the dollar amount. However, most mesothelioma trust fund settlements and lawsuit awards have been declared as compensatory amounts. Ask your mesothelioma lawyer in Texas about your specific case.

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