No, you cannot deduct medical expenses for which you have been paid. Any medical expenses that have not been covered by the settlement are deductible, though.
As to the settlement itself... if your civil lawsuit is relate to physical injuries it is non-taxable. This includes awards for
compensatory damages, including lost wages received as a result of the physical
injury. However, punitive damages, emotional distress or mental
anguish, employment discrimination or injury to reputation are generally
taxable and should be reported as “other income” online 21, form 1040. For more
information on Settlements and their taxability, please click here.
If your settlement is taxable, her is data entry:
- Federal Taxes
- Wages & Income
- Scroll down to Less
Common Income
- Select Miscellaneous
Income 1099-A, 1099-C
- Scroll down to Other
Taxable Income - enter a description and amount; the income will be reported on
line 21, Form 1040.
This answer has been verified for accuracy by an Intuit expert employee
