In 2017, I applied for a job at a company that I didn't get. Earlier this year in 2021, I got a letter saying I was eligible to receive money b/c of a legal settlement between said company and the department of labor which seemed legit (I verified this on department of labor .gov site). So I replied to the letter requesting to be apart of the settlement. Earlier this month in 2021, I got a check which I haven't cashed yet (no reason why, just kinda delayed on it), but I'm hoping to clarify some questions around it or at least be pointed in the right place. Below are some of the details of the money with the numbers I made up :
Gross Settlement Award: 3000
Wages: 2800
Interest: Blank/Empty
Total Taxes Withheld: 1000
Net Settlement Award: 2000
So I don't understand the difference between Gross Settlement Award and Wages. I got a w2 for 2021and a blank 1099-INT with the check and it seems I was only taxed on the wages, not the gross settlement award, but I received a check for the amount in net settlement award. If I add Net Settlement with Total Taxes, then it equals the gross settlement. Why wasn't I taxed on the gross settlement? Is this a mistake, i.e. should the w2 have shown the gross settlement award instead of the wages amount?
Also I paid state taxes to NY (shown on w2) but I live in TX where we don't have income tax and I've never paid state income tax before, just federal. I've never lived or even been to NY so will I have to file a state tax return for 2021 to NY because of this? Also should I have been taxed state income tax if I don't live in NY?
Let me know if I can provide any other clarifying detail.
