In general, personal injury settlements are not taxable. This is because the IRS does not consider personal injury damages to be income. However, there are some exceptions to this rule. For example, if you received a settlement for lost wages, the portion of the settlement that is intended to compensate you for lost income may be taxable. It’s also worth noting that punitive damages, which are damages awarded in cases where the defendant’s conduct was particularly egregious, are always taxable. It’s always a good idea to consult with a tax professional or an attorney to determine how your settlement may be taxed.