Deductions & credits

If the payment was made in the year you separated, it probably should have been included on your W-2.  (A 1099-MISC would be appropriate if the payment was made in the year after you separated when you are not getting a W-2.)  However, unless you voluntarily want to pay more taxes, you can report it as miscellaneous income as described, and as it was reported to you.  

 

(I would have to do more research to see if this should be counted as wages.  The difference to you is that if you count it as wages, you pay an extra 7.65% for social security and medicare tax by using a "substitute W-2 form".  This would never be self-employment income. )