makeaname
Returning Member

In an employment lawsuit settlement, do you report legal fees paid directly to lawyers from the defendant?

For a wrongful termination settlement, I received a W-2 for back wages (already taxed), and a 1099-MISC for emotional damages (for which I will report as income). My lawyers worked on contingency, so the company paid them another sum directly. My lawyers received a 1099-NEC, but I haven't received anything. Do I report the legal fees on my taxes? And if so, where?