What Is an Ex Gratia Payment?
An ex gratia payment is made to an individual by an organization, government, or insurer for damages or claims, and it does not require the admittance of liability by the party making the payment. It is voluntary and is not subject to legal obligation. Ex gratia payments are typically subject to federal and state income taxes in the U.S., but in the United Kingdom, payments under £30,000 are not taxable.
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