DavidD66
Expert Alumni

Get your taxes done using TurboTax

You cannot report a Form 1099-NEC without filing a Schedule C.  Form 1099-NEC is for Non-Employee Compensation, which must be reported on Schedule C.  The problem is if you report the proceeds from your legal settlement on Schedule C, it will be subject to self-employment tax.  Your payment should have been reported on Form 1099-MISC.  I suggest you report the proceeds on Schedule C, but add an expense to Schedule for the same amount as the payment.  This will zero out your Schedule C and result in no self-employment tax being owed.  You still need to report the settlement as income.  To do so:

 

  1. Sign in to TurboTax and open or continue your return.
  2. Search for lawsuit settlement and select the Jump to link.
  3. Answer Yes to the question Any Other Taxable Income?
    • If you've already entered miscellaneous income, select Add Another Miscellaneous Income Item.
  4. Enter a brief description and the amount you received and select Continue.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"