You do not need to report the income on your taxes. As long as you did not claim a deduction for any medical expenses related to the injuries that you received the settlement on, the entire settlement is tax-free.
If you did claim a medical expense deduction for the expenses that you were later reimbursed for through the settlement, then you need to include the settlement income to the extent you deducted medical expenses.
If you need to pick up income because you deducted medical expenses then, From the Federal section select "Wages & Income."
Then, navigate to "Other Common Income" if you received a 1099-MISC.
If you did not receive a 1099-MISC, navigate to "Less Common Income" and select "Miscellaneous Income, 1099-A, 1099-C." Enter any taxable settlement proceeds there.
IRS Publication 4345 provides the most detailed information on the topic.
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