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An In-Depth Look at the Tax Rules Around Discrimination Settlements and Awards Discrimination settlements and awards can have complicated tax implications that are not widely understood. This word investigative article will provide a comprehensive overview of the key tax issues to consider when receiving compensation related to employment discrimination. The Basics of Taxation for Discrimination Settlements and Awards When an employee receives a financial settlement or court award to resolve an employment discrimination claim, how are these funds treated for tax purposes? Here is a quick 100-word summary covering the basics: Discrimination settlements and awards may be taxable income. The central factors determining taxability are the nature of the payment and whether physical injuries were claimed. Settlements for emotional distress linked to discrimination are typically taxable. Awards to cover medical costs for physical injuries may not be. Plaintiffs should understand tax rule...