I received my first individual referral fee for referring a case (referral fee is to me as an individual, not to a firm). Do I need to report and/or pay taxes on it? My understanding is that personal injury settlements are not taxable events for the ultimate client (at least federally). Unsure as to the referring attorney.

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Posting as :
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It’s income. Whether that’s to you personally or some entity you have created, it’s income

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Thanks!

Yes, you will owe tax on it. You should be receiving a 1099 tax form from the firm that you referred the case to at the end of the year. Even if you dont, you technically still owe the tax on it. Word of advice- if you are going to be receiving referral income, create a PC, PLLC, etc to help with the tax burden.

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Thanks, much. This is helpful.

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Yep. The answers above are correct. You do have to claim it :)

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Yeah the attorneys pay tax. You aren't the injured

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Are you practicing tax law?

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