Legal Question in Sexual Harassment in California

Without knowing all the facts, it is impossible to answer your question. Generally speaking, most damages are taxable, unless directly resulting from a physical injury. But you must get advise from a tax consultant relating to your specific case before you make any tax related decisions.

Mr. Kirschbaum is correct; it depends on the terms of the settlement. In general, however, sexual harassment cases include a component of lost wages. That part of any settlement would definitely be taxable.