I am having the same issue. This is the full picture. I received a settlement for a Class Action Lawsuit. This generated two tax forms a W-2 with taxes withheld and a 1099 MISC. I have inputted the W-2 without an issue. The 1099-MISC loops and attempts to create a Schedule C. The 1099MISC has 1800 listed in Box 3 and 1600 in box 10 for attorney fees. I follow the question in the interview. I select the box that says that these funds are from a settlement of a lawsuit. I then include that 1800 listed in Box 3 which matches the amount listed on the W-2 previously entered is from back wages. This is supported in the letter and W-2 that was sent from the law firm that says "The settlement payment constitutes wages subject to withholding." The other part is non-wage income as the letter confirms in the next sentence. The next section asks how much of box 10 is taxable. I am not sure if the full amount of none of the amount is taxable. I have done both and either direction asks me to then file schedule C. Is the income in Box 10 Taxable? How do I bypass Schedule C as I don't believe that is correct? Thank you for your help and I hope the above description provides a full picture of the problem.
