Payments from class action lawsuits

Forum|Forum|1 year ago
January 27, 2025
2 replies
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In January 2024, I received a settlement payment in the amount of $92.17 in the class action lawsuit re Apple Inc Device Performance Litigation. I did not receive any tax forms. Do I need to report this settlement payment on my turbo tax forms and if so where should I report it?

Best answer by SabrinaD2

Yes, generally settlement payments should be reported on your tax return, even if no tax forms were received.

Follow these steps to report a settlement payment in TurboTax:

If you received a 1099

Log in to TurboTax - you must be logged in for the links below to work:
Click on this link to go to 1099-MISC.
Enter the information from your 1099-MISC and select Continue.
On the Describe the reason for this 1099-MISC screen, enter lawsuit settlement and select Continue.
On the Does one of these uncommon situations apply? screen,
select This was money from a lawsuit settlement and
Then answer the back wages question before selecting Continue.

If you didn’t receive a 1099-MISC:

Open or continue your return.
Click on this link to go to lawsuit settlement.
Answer Yes to the question Any Other Taxable Income?
If you've already entered miscellaneous income, select Add Another Miscellaneous Income Item.
Enter a brief description and the amount you received and select Continue.

SabrinaD2Answer

Yes, generally settlement payments should be reported on your tax return, even if no tax forms were received.

Follow these steps to report a settlement payment in TurboTax:

If you received a 1099

Log in to TurboTax - you must be logged in for the links below to work:
Click on this link to go to 1099-MISC.
Enter the information from your 1099-MISC and select Continue.
On the Describe the reason for this 1099-MISC screen, enter lawsuit settlement and select Continue.
On the Does one of these uncommon situations apply? screen,
select This was money from a lawsuit settlement and
Then answer the back wages question before selecting Continue.

If you didn’t receive a 1099-MISC:

Open or continue your return.
Click on this link to go to lawsuit settlement.
Answer Yes to the question Any Other Taxable Income?
If you've already entered miscellaneous income, select Add Another Miscellaneous Income Item.
Enter a brief description and the amount you received and select Continue.

Beeswax51 Author

Sabrina, Many thanks and appreciation for your prompt and comprehensive explanation. I followed your instructions and hopefully provided all the necessary and correct information for IRS to process my tax returns.

Kudos to Turbo Tax Experts!!

RoblAt

I received money for a class action lawsuit settlement with no 1099 or federal payer ID number.

I’m using turbotax Premier 2024. I tried to enter the information via a bogus misc-1099 form with some success, but not satisfaction. I was left with an incomplete 1099 form and a description that would not satisfy the IRS. There was a way to add another line of description by using another 1099 form.

I used another method. At the bottom of the “Your 2024 Income Summary”, you will find the less “Common Income Income” section. At the bottom of that section you will find “Miscellaneous Income,…”. Click on “Update” and at the bottom you will see “Other report table income”. On that line click on “Learn More”. You will see that other taxable income includes “Taxable court settlements.” If you click “Update”, the next window will ask you about “Taxable court settlements”. If you answer “Yes”, the next window allows you to enter the description and the amount.

This information will go on to the Sch 1, line 8z, which is the same location that the other method used.