Do you have to pay taxes on a one-time workmens compensation settlement payment?

Amounts received as workers' compensation for an occupational sickness or injury are exempt from tax if paid under a workers' compensation act or a statute like one.act. The exemption also applies to your survivors. The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury.

If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. For a discussion of the taxability of these benefits, see Other Income under Miscellaneous Income, later.

Go to the IRS gov web site and use the search box for Publication 525 Taxable and Nontaxable income