@Hal_Al wrote:
If the income is truly non taxable, a 1099, of any kind, should not have been issue. So, better than changing to a 1099-Misc, you want the employer to issue a corrected 1099-NEC showing 0 in box 1.
The taxpayer who re-started this thread, @BTC198 , received a settlement for PTSD. It's my expectation that the former employer issued the 1099 because the payment was more than $600, they want to be in compliance with the IRS, and its the taxpayer's responsibility to determine if the income is taxable, and not the company's responsibility.
Which position I completely understand (although we might quibble that it should have been a 1099-MISC instead of a 1099-NEC, but then again, we don't know all the facts and circumstances).
I really think @BTC198 is over-thinking the situation and worrying needlessly. If they have proof of what the settlement is for, they can make their case.
