Thank you for responding. The settlement agreement clearly allocates the amount due to me, and the amount due to my attorney, and that separate checks for the respective amounts would be issued, one in my name and the other in his name. For my check, they withheld about 38% of the gross amount owed to me for state and local taxes; it is LTD pay not subject to FICA.
I received the W2 for my portion 12 days ago, but they did not send me a 1099-misc reflecting my attorney's portion of the settlement. My understanding is that they are required to do so but since they haven't, I have no way of knowing if, or how, they are reporting the attorney's portion to the IRS, or if they are reporting the correct amount. This is a third party benefits administrator used by my former employer, one of the worst and most unethical. I know I need to include my attorney's portion as gross income even though his check went directly to him, how can I do that without receiving the 1099?
