You should report the class action payment as "Other Income" on your tax return. In general, proceeds from a class action lawsuit settlement are taxable unless they are for physical harm, discrimination, loss of income, or a devaluation of an investment. For more information, please see IRS Tax Implications of Settlements and Judgements.
Please follow the instructions from this TurboTax Help Article to enter your income without a Form 1099:
- 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.
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