You can report it as "other income" on Schedule 1 line 8z with a description that you enter. Here's how to enter it in TurboTax.
- In the Search box in TurboTax type "lawsuit settlement" (without the quotes), then click the link that says "Jump to lawsuit settlement." I know that's not what the income was from, but it's the only search term I could find that gets you to the right place.
- The first screen asks, "Any Other Taxable Income?" Click Yes.
- On the next screen, "Other Taxable Income," enter a short description such as "Excess refund" and enter the amount. Click Continue.
- On the next screen click Done.
- You will get a couple more screens with unrelated questions. If they don't apply to you, just answer No and click Continue.
