Generally not taxable. Insurance money you receive after a car accident or when your car has been stolen is not reported as income, says Burke. "If you are repairing or replacing your personal vehicle, then you don't have to pay taxes on the insurance benefit," he notes.

Workers' Compensation is in the same category of non taxable income as the following: Payments from public welfare fund. Compensatory (but not punitive) damages for physical injury or sickness. Disability benefits under a “no fault” car insurance policy for loss of income or earnings capacity as a result of injuries.

If you receive a settlement for personal physical injuries or physical sickness and did not take an itemized deduction for medical expenses related to the injury or sickness in prior years, the full amount is non-taxable. Do not include the settlement proceeds in your income.

The portion of your settlement paid for pain and suffering and emotional distress is usually not taxable. The IRS considers such payments reimbursement for your actual injuries. A physical injury can be diagnosed in medical terms, but the pain and suffering associated with that same injury cannot.