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February 12, 2021
Question

I received a 1099-NEC form from my rehab facility due to an injury they caused. They agreed to pay for my medical visits. I don't work for them. Is this NEC valid?

  • February 12, 2021
  • 1 reply
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Do I have to add this 1099-NEC to my 2020 taxes?  It definitely wasn't income to me and I was a patient, not any type of employment money.  It was an injury settlement.

1 reply

February 12, 2021

Yes, you have to add this settlement to your taxes.  Note that as IRS is also receiving a copy of this form, it is important for you to report it so to match their record on your tax return.  Although this is not an employment related income, if you did receive this benefit ( payment for your medical visits), you must report it.  However, instead of being treated as self employed ( taxpayer who receive this form mostly are), you would report it under "Other Income".  To enter the info in the program, here are the steps:

 

In TurboTax online, 

  • Sign into your account, select Pick up where you left off
  • From the upper right menu, select Search and type in 1099nec and Enter
  • Select the Jump to 1099nec
  • Follow prompts
  • On screen, " Does one of these uncommon situations apply? select "lawsuit settlement" and Continue

This amount will show on line 8 of your Form 1040, carried over from Schedule 1. 

If you have never received this settlement amount, you would need to contact the hospital for a corrected 1099-NEC.