Is my Georgia car accident settlement taxable?

Is my Georgia car accident settlement taxable?

In most cases, no. If your car accident settlement compensates you for physical injuries—broken bones, TBI, spinal injuries, burns, or other bodily harm—the compensatory damages are excluded from federal income tax under IRC § 104(a)(2). Georgia has no state income tax on such proceeds either. However, any punitive damages or pre-judgment interest in the settlement ARE taxable.