1099 Misc

3 replies
21 views

My Wife received an 1099 Misc. for over payment of benefits that she paid. Is it taxable

TurboTax Live Deluxe Online

GiseleD

Alumni - Intuit

It is highly likely that she will have to pay taxes on this income. Can you provide some more details on why it was issued so that we can provide guidance on how to enter it?

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

Jim1959Author

Level 2

It was part of a lawsuit settlement by large group of employees that were over paying for health care insurance.

DavidS127

Alumni - Intuit

Typically, a lawsuit settlement payment reported on a 1099-MISC amount is for attorney's fees, punitive damages, emotional distress, other physical injuries, and prejudgement interest. Depending on the nature of this payment, it may be taxable.

This IRS Publication 4345 on Settlements Taxability has the specifics on what portion of a lawsuit settlement you must include as taxable income. Use it as a guide for how to answer TurboTax questions about your wife's 1099-MISC.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"