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Taxable legal settlements are not considered self-employment income and do not need to be entered on a Schedule C. The income is reporter as Other Income.

First, delete the 1099-NEC that you entered:

1. Launch TurboTax
2. Type in 1099-NEC at the search bar at the top of the screen and select Jump to 1099-NEC
3. Delete the 1099-NEC from your settlement

Next, follow the steps below to enter your 1099-NEC so you will not be subject to self-employment taxes:

1. Click Add a 1099-NEC
2. Enter the information as shown on your form
3. Type Lost Wages on the screen that says “Describe the reason for this 1099-NEC”
4. The next screen will say “Does one of these uncommon situations apply?” Select “This was money from a lawsuit settlement” and answer the question “Was any part of the lawsuit settlement for back wages?”

1. Select Continue.

Please review the TurboTax Help article Where do I enter an award from a taxable legal settlement? for additional information.