Your net settlement will be reported on Form 1040 Schedule 1 Line 8 other income. To enter your net settlement from form 1099-MISC follow these steps.
- With TurboTax open select Wages & Income.
- Scroll down to Less Common Income and select Miscellaneous Income, 1099-A, 1099-C
- On the next page, select Other reportable income
- On the page, Other Taxable Income enter Net Settlement In Program in the description.
This will put the income on Schedule 1 Line 8 of your Form 1040, as required by the IRS. You will pay state and federal income tax on the amount, but it will not be subject to self-employment tax.
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