According to the Internal Revenue Service, personal injury settlements and awards are not considered income and are, therefore, not taxable. There is an exception when it comes to punitive damages, however, as that portion of the award does not pay for specific impacts and expenses related to the injury. In settlements that include both compensatory (economic and non-economic) damages as well as punitive damages, claimants only pay taxes on the punitive portion.
It is worth mentioning that if you claimed an itemized deduction of medical expenses resulting from your burn injury on your taxes and you later recover damages related to medical expenses, you will need to pay back the deducted amount.