Tax
Oct. 31, 2022
California gives PG&E & Edison fire victims tax breaks
California has passed two laws that will shield many wildfire victims from having to pay a state tax on their fire legal settlements.
Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
Most legal settlements are taxable, even for a devastating fire loss. But California has passed two laws to shield wildfire victims from state tax on their fire legal settlements. One applies to PG&E recoveries, the other to Edison. Both laws provide tax relief from California’s high – up to 13.3% – income tax. But the IRS still treats lawsuit settlements as taxable. Proposed federal bills, essentially identical to each other, have been introduced in both the Hou...
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