Please see this answer from DianeW777.
You can use these steps to report your settlement from the lawsuit. These steps will report the lawsuit 1099-NEC without adding any taxes.
- Federal
- Income from 1099-NEC
- Fill in info from the 1099-NEC
- Describe the reason for the 1099-NEC as Lawsuit Settlement
- Does one of these uncommon situations apply? check This was money from a lawsuit settlement
- Answer Yes Was any part of the lawsuit settlement for back wages?
- Enter the amount that was for back wages
