Recently I was involved in an automobile accident. I missed some time from work and now have to take time off to go to physical therapy. Injury coverage from the auto insurance is compensating me for most (85%) of the lost salary. The first check just arrived, and no taxes were withheld. So that I know if I should set some money aside for a possible tax bill in the future, I'm wondering if (in the U.S.) this is considered taxable income.


Yes, wages are taxable, and insurance payouts for lost wages are also taxable.

They aren't required to withhold taxes, but they will give you a 1099 (if under $600 they aren't required to file a 1099, but likely will anyway).

IRS Publication 4345 outlines the tax implications of settlements.

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