Are Payments From a Structured Settlement Annuity taxable?
John Darer • March 7, 2019
It's a trick question
Shocking Fact About Structured Settlement Annuities
A common misconception is that structured settlement annuity payments are always not taxable. This is not true. While many
types of cases are resolved using structured settlements, there are instances where structured settlement annuity payments could be taxable. The fact is that structured settlement annuities have absolutely nothing to do with the taxation of structured settlement annuity payments.
A structured settlement is merely the vessel on which the damages travel to the payee.
The Proof is in the Damages
It is the damages that the annuity payments represent that affects the taxation of the annuity payments.
- If the payments represent damages on account of personal physical injury, physical sickness, or wrongful death, then the damages will be tax free, consistent with and within the meaning of IRC Section 104(a)(2)
- If payments represent workers compensation, then such payments will be tax free , consistent with and within the meaning of IRC 104(a)(1)
- If the payments represent damages as compensation for wrongful imprisonment, such payments will be tax free, consistent within and within the meaning of IRC 139F
- If payments represent taxable damages, then such structured settlement annuity payments will be taxable.
In the structured settlement annuity industry, dominated by many of the largest life insurers in the United States, Independent Life Insurance Company (ILIC) achieved significant milestones in 2024. Good news, positives and some concerns discussed in this lattest post.
Prudential and Pacific Life have once again been named among the world's most ethical companies. Prudential received the award for the 11th time., Pacific Life received the award for the 8th time. Prudential and Pacific Life are leading issuers of structured settlement annuities.
John Darer reviews structured settlement annuity market expansion featuring 3 new entrants Athene Life & Annuity, American National (ANICO) and Puritan Life as well as MetLife's development of a best in class
What is a Settlement Agreement and Release? What is the role of a Settlement Agreement and Release in establishing a structured settlement? What is a compromise?
John Darer reviews the primary structured settlement market, secindary market and tertiary structured settlement markets
A structured settlement annuity does not drive the tax consequences of structured settlement annuity payments. It is the type of damages the structured settlement annuity payments represent, as reflected in the relevant settlement documentation executed by the settling parties
Structured settlement beneficiary death claim. An executor cannot change the beneficiary of a structured settlement annuity. StructuredTypically, settlement agreements permit the Payee to name or change a beneficiary, provided such change is in writing and submitted to the Assigmment Company or annuity issuer in writing and in proper form.
Which life insurance companies write structured settlement annuities for personal injury and wrrongful death settlements in Bronx, Brooklyn, Staten Island, Queens, Manhattan, Long Island, Westchester, Erie, Rockland, Albany,Monroe in 2025 through licensed representatives?
Why Structured Settlements? Because Certain Sells® Structured settlements offer predictable income streams, which can be appealing to rein in uncertainty. John Darer reviews some other reasons that structured settlements are increasingly being used to settle cases:
Structured settlements have roots that trace back more than 100 years, from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as the core personal injury settlement planning tool it is today.
