Get your taxes done using TurboTax

We need a lot more information.

 

Generally, a payment for lost or back wages is considered taxable as if it was wages.  The employer should issue a W-2 and withhold social security and Medicare tax.

 

Payments for other damages are taxable as miscellaneous or "other income."  The employer should issue a 1099-MISC.

 

Payments for physical injury are not taxable at all.