If you won a judgment or received a settlement for a claim of unlawful discrimination, you may be able to deduct the attorney fees and court costs involved in the lawsuit as an adjustment to your Adjusted Gross Income (AGI).
Go to this section in Credit Karma Tax: Other Expenses
To claim this deduction, your situation must meet all the following requirements:
- The lawsuit is for an unlawful discrimination claim.
- Your claim must fall under provisions of federal, state or local laws listed in the Internal Revenue Code section 62(e), be a claim against the U.S. government or fall under Section 1862(b)(3)(A) of the Social Security Act.
- You must pay the attorney fees or court costs yourself or they must be paid on your behalf.
- The judgment or settlement occurred after Oct. 22, 2004.
- Your deduction can’t exceed the amount of any judgment or settlement you received, and included as income in your federal income tax return for the tax year.