Hi. Thank you. No, I do not believe I received "income."
The settlement called for several things. 1) for my wife's health insurance company to process and pay all claims impacted. 2) It also required the University to pay all my attorneys fees for my having to bring a suit. 3) It also required the University to reimburse me for all thousands of dollars I had to pay the hospital and providers that I was forced to pay when all the (pre-authorized, pre-approved) health claims were later (wrongly) denied by the third party claims administrator in violation of my civil rights. I did not receive any extra money "income," no pain and suffering, or windfall of any type. My attorney says he got a 1099 for his attorney's fees that he was paid and he would email me a copy and I should use his form. I said I did not think I could file his payment amount on my taxes because the 1099 is in his name. I have received no tax forms, no 1099-misc, nothing.
Given this information above, do I still follow your directions?
If the terms of the settlement you received were limited to reimbursement of medical expenses and related attorney fees, then you wouldn't have any taxable income to report and nothing to deduct.
If you had taxable damages from a civil rights case, then you could deduct the portion of the settlement that represented attorney fees.
Whether a lawsuit settlement payout is taxable depends on what the settlement represents. If this is a refund of previously paid insurance premiums or medical expenses, then it is nontaxable unless the amount was previously deducted on your tax return.
See IRS Publication 4345 and this IRS article for more information about legal settlements.
