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F1 student, OPT from July 2020. I had an accident where I was hit by a car (I was pedestrian). I filed a claim through my lawyer and received money from the car driver's insurance company (around 60K).

Is it okay to transfer this money to my home country India, to my family? Any taxes, limitations, rules involved?

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  • It’s not ok. Keep the money and spend it on yourself. It’s compensation for you suffering an injury. It’s meant for you to do enjoyable things with it that compensate for your suffering. You also may need money to fix health problems from the injury later in life.
    – gnasher729
    Apr 11 at 7:03
  • There are lots of questions on this site about the tax implications of transferring money.
    – DJClayworth
    Aug 7 at 13:40

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As a general rule, insurance settlements aren't taxable. The purpose of the settlement is to make you whole from an injury or accident - you're not experiencing any taxable gain there.

As far as other considerations on the money transfer or other limitations, engage your lawyer.

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  • That's not necessarily true. Insurance proceeds for bodily harm are not taxable, but attorney fees award portion most certainly is (and it is a thing that bites a lot of people in injury cases). In this case though it's probably safe to assume that the attorney fees component is not large, if at all.
    – littleadv
    Apr 14, 2022 at 7:12
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As far as taxes - that $60k will very likely be taxable (to some extent) on your 2020 personal tax return (my questionnaire always asks about things like that). You should talk to a tax professional as soon as possible.

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