Good news for California residents who have received settlements from the PG&E Fire Victims Trust (FVT) or the Southern California Edison Settlement. Last night, both houses of the California legislature passed AB1249 and SB1246 and the Governor is expected to sign them.
This bill excludes the settlement money from gross income for California income tax purposes. This treatment is available to victims of the 2015 Butte Fire, the 2017 North Bay Fires, the 2018 Camp Fire, the 2017 Thomas Fire, 2018 Woolsey Fire.
Note this is for California income tax ONLY. Your settlement may still be partially or fully taxable for Federal Tax purposes. If you are not a California resident, your settlement may still be taxable to your resident state.
To get more information about the Federal Taxability of your settlement please see our earlier posts on this topic and contact a tax professional.