What type of settlement did you receive?
Physical injury or sickness settlements (dog bites, mesothelioma, etc.) are nontaxable and don't need to be reported unless you deducted medical expenses related to the injury on a previous tax return and you received a tax benefit from the deduction. In that case, report the medical expenses related to the incident as miscellaneous (other) income.
For more information please check:
To report taxable legal settlements not reported on a 1099-MISC:
- Sign in to TurboTax and open or continue your return
- Search for lawsuit settlement and select the Jump to link
- Answer Yes to the question Any Other Taxable Income?
- If you've already entered miscellaneous income, select Add Another Miscellaneous Income Item
- Enter a brief description and the amount you received and select Continue
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