Federal Regulations
IRC Section 104(a)(2)
This section of the Internal Revenue Code excludes damages received on account of personal physical injuries or physical sickness from gross income. That federal tax treatment is the foundation for the tax-free status of qualifying structured settlement payments. See 26 U.S.C. Section 104(a)(2).
IRC Section 130
Allows for qualified assignments, enabling defendants to transfer their periodic payment obligations to a third party. This facilitates the settlement process while preserving tax treatment for the claimant. See 26 U.S.C. Section 130.
State Structured Settlement Protection Acts (SSPAs)
All 50 states and D.C. have enacted SSPAs to protect recipients who wish to sell their future payment rights (factoring). The federal tax code separately defines a qualified order for structured settlement transfers under 26 U.S.C. Section 5891, while the exact approval standard is set by the state law that applies to the transfer. Key provisions typically include:
- Court Approval: Transfers must be approved by a court or administrative authority.
- Best Interest Standard: The transfer must be in the best interest of the payee and their dependents.
- Independent Advice: Payees are often required to seek independent professional advice before selling payments.
Professional Certifications
CSSC
Certified Structured Settlement Consultant
Offered by NSSTA in conjunction with the University of Texas at Austin. Requires 80+ hours of study and passing a comprehensive exam.
MSSC
Master Structured Settlement Consultant
An advanced designation for experienced professionals, focusing on complex settlement planning and master-level case studies.
Find a Certified Professional
Browse our directory to find planners and brokers with CSSC or MSSC designations.
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