My oil company over charged me for oil and there was a class action suit and I was reimbursed $150 for the oil I purchased. Do I need to claim as income?

Forum|Forum|1 year ago
January 17, 2025
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PatriciaV

Employee

Yes, most legal settlements are taxable. Enter this information under Income from 1099-MISC, even if you didn't receive Form 1099-MISC. Under this section, check the box for "Lawsuit Settlement." You may deduct any related attorney fees that you paid as an adjustment to the 1099-MISC.

For more info, see: IRS Settlements Brochure

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DkimmalAuthor

I found on-line the exert that you quoted and also a reply that said "If the class action settlement is taxable, the payer must report the income on a 1099 form and send it to you." Would I not get a 1099-Misc because the amount is less than $600 or because I do not need to claim?

PatriciaV

Employee

Yes, it's possible you didn't receive Form 1099-MISC if the amount was under $600. However, you must still report the income you received because the IRS considers all income to be taxable.

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