Get your taxes done using TurboTax

Legal settlements are often taxable, but it depends on the type of settlement. The settlement type will be listed in your Final Settlement Agreement.

Here are the steps to enter the 1099-NEC.

1. Open TurboTax.
2. Federal > Wages & Income > "I'll choose what I work on."
3. 1099-MISC and Other Common Income > Income from Form 1099-NEC > Start/Update.
4. On the screen below, select "Yes."

  5.  Select, " Add a 1099-NEC."

   6.  Enter your 1099-NEC > Continue.

      7.  Enter the reason for the 1099-NEC > Continue.

  8.  Select "This was money from a lawsuit settlement."

  9.  Answer "If any of the lawsuit settlement was for back wages," > Continue.