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While physical injury awards are tax exempt, awards for emotional distress are not. Since attorney fees are usually considered part of the award, plaintiffs end up paying taxes on money that they never even see. For instance, in the case of a recent sexual harassment suit, the plaintiff ended up owing $400,000 in taxes -- $100,000 more than her actual award. According to Paula Brantner, program director at Workplace Fairness, it's a big issue. "It comes up in pretty much every employment case," she says.
September 26, 2002 at 12:00 AM
1 minute read
The original version of this story was published on Law.Com
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