In general, the part of the settlement that is for back wages should be reported on a W-2 and is subject to social security and medicare tax. Any portion of the settlement that is for punitive damages, interest, or other non-wage damages should be reported on a 1099-MISC, and is taxable income but is not subject to social security and medicare tax.
The question exists because some payers send the wrong paperwork. If you don't know if there are wages in the 1099, you need to ask the settlement attorney. But it sounds like you got the right paperwork and there are probably no wages in the 1099 amount, just the W-2 amount.
