Is a structured settlement better for tax purposes in Georgia?

Is a structured settlement better for tax purposes in Georgia?

A structured settlement—where compensation is paid in installments over time rather than in a lump sum—provides several advantages. Under IRC § 104(a)(2) and IRC § 130, properly structured periodic payments from a physical injury settlement are fully excluded from income, including the earnings component (the “interest” embedded in future installments). This makes structured settlements uniquely favorable for catastrophic injury cases with large future medical care needs.