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March 12, 2021
Question

IF I RECEVIED A SETTLEMENT CHECK AND THEY SENT ME A 1099 MISC AND A W2 WHAT FORM DO I FILE

  • March 12, 2021
  • 2 replies
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2 replies

Employee
March 12, 2021

That depends on the facts, probably both.  If you settled a lawsuit and were awarded back wages plus other damages (punitive damages, interest, other expenses) then you should receive a 1099 for the other income portion and a W-2 for the wage portion.  Both are taxable.  The 1099 may also represent money that was part of your settlement that was paid directly to your lawyers, that is still taxable income to you, as if you had received the money and then paid the lawyers separately.

 

If you received a 1099 and W-2 for the same income, we will need more information to understand the situation. 

March 12, 2021

You'll need to file both the W-2 and the 1099-MISC form.

 

To enter your W-2, see  How do I import or enter my W-2?

 

If your 1099-MISC has an amount in Box 3, enter it as follows:

To enter a 1099-MISC in TurboTax:

  1. Open or continue your return, if you're not already in it.
  2. Search for 1099-misc and select the Jump-to link.
  3. Answer Yes to Did you get a 1099-MISC?
    • If you already entered a 1099-MISC, you'll be on the 1099-MISC Summary screen, in which case select Add Another 1099-MISC.
    • If you need to edit or delete a previously-entered 1099-MISC, select the appropriate button.
  4. Enter the info from your form into the corresponding boxes.
    • If you need to enter boxes 4–6 or 8–17, check My form has other info in boxes 1–17 to expand the form.

Tax settlements may be taxable but it depends upon the type of settlement. The settlement type will be listed in your Final Settlement Agreement. For additional information see Are legal settlements taxable?

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