Depends on the type of settlement! If it was for Social Security Disability, then no ! If it was for anything health related, they won't tax you. I wish you would have said what the settlement was for. But 9 out of 10 Govt. settlements do not get taxed .
Some government settlements are taxable, though not all and this varies with each individual's case. If you had a physical illness or injury, then the settlement is not taxed but if not, then the settlement is subject to taxation.