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| *Ostroff, Fair and Company>>>Canada Taxes |
Are car accident lawsuit settlement taxable in Ontario, Canada? |
there will be portion of it to compensate loss of income (past and future) and other for pain that is on going. My best guess is past income ($48K-most recent income $19K) multiply 4 yrs less lawyers fee= $86K...I am hoping to get closer to settlement soon but wish to get funds in the new yr for tax purpose cause this would cause such additional headaches. Thank you It's non-taxable as per CRA's website: "Amounts that are not taxed You do not have to include certain amounts in your income, including the following: - any GST/HST credit or Canada Child Tax Benefit payments, as well as those from related provincial or territorial programs; -child assistance payments and the supplement for handicapped children paid by the province of Quebec; - compensation received from a province or territory if you were a victim of a criminal act or a motor vehicle accident; - lottery winnings; - most gifts and inheritances; - amounts paid by Canada or an ally (if the amount is not taxable in that country) for disability or death due to war service; - most amounts received from a life insurance policy following someone's death; and - most payments of the type commonly referred to as strike pay you received from your union, even if you perform picketing duties as a requirement of membership." Source(s): http://www.cra-arc.gc.ca/e/pub/tg/5000-g... I had a major car accident about seven years ago and received a settlement including loss of income. I didn't pay any taxes on it and I live in Ontario. The best way to know if -in your circumstances you will have to pay is to make a (free) phone call to your local H&R block and ask them. Or ask Revenue Canada-Canada Revenue Agency (CRA) 1 800 959-8281 (For more numbers and a local number for the area you live in-check the blue pages at the back of your white pages telephone book) I hope this helps. WOO- HOO This kind of income is NOT TAXABLE to you. You do not put it on your tax return anywhere. Where the government may get you, is if you invest it and it generates income, then that interest income will get taxed -- just not the principal. Just don't get talked into putting it into an RRSP because then when you take it out, it will now be taxed. |
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