Every state is at liberty to frame their tax laws regarding the taxability of court case awards and settlement amounts. California is one state which is undergoing economic problems even as its inhabitants earn more than any other state in the United States. Citizens who live within the city confines of San Diego have collected mesothelioma settlement cases and won court cases for their exposure to asbestos. If these proceeds are taxed it will definitely have impact on the total sum they get for every case.
Several people of California have put up claims against the mesothelioma trust fund. The fund was earmarked by a court decision so as to be of assistance to look after sufferer's interests till each could receive the sum payable to them. The number of sufferers is increasing and the fund is decreasing; nevertheless dues are eventually reaching the needy citizens and the lawyers who pleaded their cases. California lawyers get paid only if the client gets an award favoring him. Many of those who received settlement amounts want to know whether this amount will be treated as income for taxation purpose. Same is the dilemma with the people of San Diego. The best persons to ask would be mesothelioma legal experts from San Diego, California.
California State Income Tax
However, since California is cash starved would want to get as much returns from its people in form of taxes. It will mean likely tax on settlement proceeds. Fortunately, in California the penalizing compensation component of the settlement is construed as income for taxation.
Thus any amount received as compensation, will not attract taxes. Also tax-free would be the money received for emotional suffering. The asbestosis legal representative can give you precise guidance and that too for free. Hence California residents need not pay any taxes for lung cancer or mesothelioma settlement or lawsuit payments.
What About the City of San Diego?
The city of San Diego people are accountable to California State for income tax. The tax can be as petite as 9.3 percent in 2010 with an extra 1 percent for sums over a million dollars. The state does not reckon the mesothelioma lawsuit settlement money for asbestos exposure for anybody irrespective where they belong, except of course the penal amounts which have to be mentioned separately.
What About Mesothelioma for Federal Income Tax?
The U.S. IRS (Internal Revenue Service) also levies taxes on penal awards and not on what is received as compensation or the amount got to cover treatment for the emotional suffering. Penal compensation must be stated for federal income tax purposes and taxes paid on some portion of the dollar amount. The best person to consult would be your mesothelioma lawyer in San Diego, California.