You are correct, it is not self-employment income. It should not be linked to a Schedule C. Since the settlement was for back wages, it should have been reported on a Form W-2. To report in TurboTax Online, while logged in to your return:
- Type "Other Income" in Search
- Click on "Jump to other income"
- Answer "Yes" to "Did you get a 1099-MISC?"
- Enter the information on your 1099-MISC
- Enter the total amount in Box 10 as "Taxable Attorney's Fees" (Attorney's fees received in a settlement in an employment dispute are taxable to the plaintiff, even if the fees are paid directly to the attorney.)
- Enter "Back Wages" or similar to Describe the reason for the 1099-MISC
- On the screen with "Does one of these uncommon situations apply?" Mark the button for "This was money from a lawsuit settlement"
- Answer Yes to "Was any part of the lawsuit settlement for back wages?"
- Enter the amount you received that was for back wages
- Click on "Continue"
- Leave the blank empty on the page "Self-Employed" Income, and click on "Continue"
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