The W2 portion often reports the amount of the settlement that was back wages and the associated taxes that were also paid and withheld on your behalf.
You should treat this as any other Form W2 you would receive.
Any portion of the proceeds that are not subject to payroll taxes are reported on Form 1099-MISC.
The types of payments that would be included on this form include attorney’s fees, punitive damages, emotional distress and other nonphysical injuries, and prejudgment interest.
This is also taxable income to you and no taxes have been withheld.
