Please clarify. There may be three or four separate tax issues here.
You received disability pay for 2016 that was included on a 2016 W-2? And then you had to repay some of that disability pay in 2017? That's one issue with a particular tax solution.
Then you received an insurance payout and part of the payout was for lost wages? Was the lost wages part of the pay out the same as the amount of disability pay that you had to repay? Or more, or less?
Then, part of the insurance payout was for pain and suffering?
Then, part of your insurance payment was taken by your employer to reimburse your employer for the cost of your medical care? Was the employer a party to the lawsuit? Was the insurance policy paid for by the employer or was it a private policy?
