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Will people who recieve this money be prepared at tax time? Or do you think some will expect this to be tax-exempt?

WASHINGTON – The Internal Revenue Service says oil spill victims who receive BP payments for lost wages will have to pay up come tax time.

IRS wants taxes from BP payments for lost wages

Under current law, BP payments for lost wages are taxable — just like the wages would have been, the IRS said in tax guidance issued Friday. Payments for physical injuries or property loss, however, are generally tax free. Payments for emotional distress? Taxable, though medical expenses related to the emotional distress are deductible.

 
mancosmomma

Asked by mancosmomma at 4:40 PM on Jun. 25, 2010 in Politics & Current Events

Level 19 (7,315 Credits)
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Answers (5)
  • Some will be prepared, but I am guessing that at least 24% of them won't (wasn't that the percentage of people who think that government has all the money they need?).

    QuinnMae

    Answer by QuinnMae at 5:47 PM on Jun. 25, 2010

  • mancosmomma

    Comment by mancosmomma (original poster) at 4:41 PM on Jun. 25, 2010

  • I say that's fair....I think they should have been made aware of this at the time of the first payment.
    CAGirl4

    Answer by CAGirl4 at 4:42 PM on Jun. 25, 2010

  • I think it's fair. But I have a feeling we'll be hearing the opposite soon or nearer to tax time.
    wildflowers25

    Answer by wildflowers25 at 4:51 PM on Jun. 25, 2010

  • I'm guessing a bunch of them will come up short at tax time and scream their heads off about it.
    MunchMunch

    Answer by MunchMunch at 5:01 PM on Jun. 25, 2010