topic Re: 1099-Misc Class Action Settlement in Get your taxes done using TurboTax

1099-Misc Class Action Settlement

jayarmenta22 — Fri, 31 Jan 2020 14:13:23 GMT

Hello,

I received a settlement for a class action lawsuit against target for not providing seats to cashiers. The amount is $368. Do I have to claim this on my taxes? The amount is listed in box (3) for other income and not sure if this would be considered tax or non-taxable? Also, don't know under what "type" of other income would this be considered.

Note: I'm filing taxes in California, not sure if that makes a difference.

Re: 1099-Misc Class Action Settlement

Irene2805 — Fri, 31 Jan 2020 14:53:39 GMT

Yes - the proceeds from your lawsuit are taxable. It sounds as if you received a 1099-MISC reporting the income. This is how you should enter it in TurboTax:

Click on Federal > Wages & Income [In TT Self-Employed: Personal > Personal Income].
Scroll down to the Other Common Income section and click on the Start/Update box next to Income from Form 1099-MISC.
If you previously entered a 1099-MISC. in your return, you will be brought to the 1099-MISC Summary page. Click on the Add Another 1099-MISC. box to add a new form [or Edit to change an existing form].
If you haven't already entered a 1099-MISC, answer Yes to the question Did you get a 1099-MISC? (even if you didn't get one).
On the Let's get the info from your 1099-MISC screen, complete the top part and then enter the award amount in Box 3 Other Income.
Fill out any other boxes from your paper 1099-MISC, then click Continue.
Enter a reason for the 1099-MISC,
On the screen, Does one of these uncommon situations apply? select This was money from a lawsuit settlement and then answer the back wages question before clicking Continue.

Re: 1099-Misc Class Action Settlement

jayarmenta22 — Fri, 31 Jan 2020 14:57:43 GMT

Thanks Irene2805, I really appreciate your help 🙂

Re: 1099-Misc Class Action Settlement

TamayaW1 — Sun, 16 Apr 2023 17:07:52 GMT

I believe I got a 1099 C form from a settlement from a class action lawsuit from a previous job and was wondering if this means I got the check from back wages. On the form it says..

"The parties agree that 25% of individual settlement amounts are for alleged unpaid wages, and subject payroll taxes to be reported on an IRS Form W-2; 75% shall be allocated as penalties and interest and will be reported on IRS Form 1099."

Does this mean it was a settlement for back wages? Turbo tax also asks me to enter the amount that was for back wages but I don't know where to find it.

Re: 1099-Misc Class Action Settlement

Vanessa A — Mon, 17 Apr 2023 19:07:57 GMT

A 1099-C is for cancellation of debt. Do you mean a 1099-Misc?

If you received an amount and 25% was for back wages, then you would multiple the full amount you received by .25 and enter that as the amount for back wages.