February 23rd, 2006

That $9 you got from the PayPal settlement? Taxable income.

If you’re like many people, you signed up for the PayPal class action lawsuit and got around $9 for filing a claim against the Statutory Damage Fund. My read of IRS publication 4345 says that this constitutes taxable income. Note: This is just my personal opinion. Consult with your tax advisor before taking action. As for me, I reported it. Given my previous experience with the IRS, I’m willing to fork over the $3 to avoid getting audited.

Author

Raymond has been involved in the evolution of Windows for more than 30 years. In 2003, he began a Web site known as The Old New Thing which has grown in popularity far beyond his wildest imagination, a development which still gives him the heebie-jeebies. The Web site spawned a book, coincidentally also titled The Old New Thing (Addison Wesley 2007). He occasionally appears on the Windows Dev Docs Twitter account to tell stories which convey no useful information.

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