You likely received two statements related to this lawsuit: a W2 and a 1099-MISC. The W2 portion 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.
The proceeds of the settlement that are not subject to payroll taxes are reported on Form 1099-MISC.
Please clarify what box is checked on your Form 1099-MISC?
As in other post, box 3 amounts should not generate Schedule C or Schedule SE in TurboTax. Do you have any other self-employment income from Form 1099-NEC or 1099-K on this tax return?
The types of payments that would be included on this your settlement 1099-MISC 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.
