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Deductions & credits
To add: The following is information on how to enter your settlement into TurboTax:
Where do I enter an award from a taxable legal settlement?
Interest earned on settlements is taxable income and should be entered as a Form 1099-INT.
If you received a 1099-MISC:
- Sign in to TurboTax and open or continue your return
- Search for 1099-misc and select the Jump to link
- If you're asked Did you get a 1099-MISC?, answer Yes
- If you've already entered a 1099-MISC, select Add Another 1099-MISC
- Enter the information from your 1099-MISC and select Continue
- On the Describe the reason for this 1099-MISC screen,
enter lawsuit settlement and select Continue - On the Does one of these uncommon situations apply? screen, select This was money from a lawsuit settlement and then answer the back wages question before selecting Continue
If you didn’t receive a 1099-MISC, follow these steps to report the income:
- Sign in to TurboTax and open or continue your return
- Search for lawsuit settlement and select the Jump to link
- Answer Yes to the question Any Other Taxable Income?
- If you've already entered miscellaneous income, select Add Another Miscellaneous Income Item
- Enter a brief description and the amount you received and select Continue
April 16, 2023
8:23 AM