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Level 2
posted Mar 28, 2025 11:37:41 AM

Dell Tech Litigation Payment

On 01-31-24 I received a payment of $229.24 indicating that it was from Dell Technologies Inc - Litigation Payment.  It was deposited into my Ameritrade Account.   Is this payment taxable?  I did not receive any 1099 forms from Ameritrade.  Not sure if the reason I did not is because it is not taxable or if because Ameritrade became Charles Schwab.  (There is nothing on my Charles Schwab account related to this payment.)

 

If it is taxable, how/where do I enter it?   Thank you!!

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1 Replies
Expert Alumni
Mar 28, 2025 11:58:06 AM

Tax implications of settlements and judgments states: The key question to ask is: "What was the settlement (and its corresponding payments) intended to replace?"

 

If the lawsuit was in regards to taxable income, the lawsuit proceeds would be taxable income.

Yes, the shift from Ameritrade to Schwab created issues since not all information carried over. 

 

A lawsuit settlement should have sent you a 1099-MISC with the income in box 3. Follow these steps:

  1. Log in to your return.
  2. Go to income
  3. Scroll down to Other Common Income
  4. Select Income from 1099-MISC
  5. Edit/ Start/ Revisit
  6. Enter income -the income should be in box 3,
  7. Enter tax if any withheld in box 4
  8. Continue
  9. Describe the reason -
  10. continue
  11. None of these apply
  12. Continue
  13. Did this involve main job?
  14. No 
  15. Continue
  16. How often do you get?
  17. Got in 2024 
  18. Continue
  19. Intent to earn money?
  20. No
  21. Continue
  22. Do you have another?
  23. No
  24. Continue