Question

I had a Disability settlement in 2020 and that was my only income. Do I need to file income taxes?

Forum|Forum|5 years ago
February 27, 2021
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TurboTax Free Edition Online

Most disability payments are taxable and need to be reported on your return. How they are reported depends on how they were paid (and reported) to you.

Some disability pay is reported on a Form W-2, some is reported on Form 1099-R and some (usually proceeds from a lawsuit) are reported on Form 1099-MISC - in each case they are entered in the appropriate interview of TurboTax.

If any part of the payment was compensation for pain and suffering, that would not be taxable. Payments for lost wages are taxable.