When someone is physically injured and gets a money award from settlemenet or trial, that money is not taxable.  The key words here are “physical injury.”  Emotional distress alone is not cosidered a physical injury and, of course, discrimination is not physical.  Therefore, an award for either of those situations or similar sitiuations is taxable as income.  If in a doiscrimination lawsuit it is alleged that the boss shoved the plaintiff, which is a physical assault, and if the jury awarded the plaintiff a certain amount for the assault and another amount for the discrinimation, then the assault portion would not be taxable.