In 2021 I received a settlement for a lawsuit related to denied healthcare for procedures that were illegally denied by the insurance plan. I was one of eight plaintiffs, and we each received a part of the settlement based on our out of pocket costs to pay for care that should have been covered, plus we each received emotional distress damages as well. The settlement was paid to our law firm who then in turn paid each plaintiff. I was issued a 1099-MISC for the full amount of what I was sent to me by the law firm as part of the settlement.
I am not clear how much if any of the settlement is taxable. I received approximately $36,000 from the settlement, and of that $13,000 was reimbursement for my out of pocket medical expenses, and $23,000 was listed as emotional distress damages. What of this is taxable (if any) and how do I report that using TurboTax. I assume since I have a 1099-MISC I need to add it to my filing, but how do I offset the amount that should not be taxed.
Thank you,
Julia
