topic 1099 Misc in Deductions & credits

1099 Misc

Jim1959 — Fri, 31 Jan 2020 23:54:46 GMT

My Wife received an 1099 Misc. for over payment of benefits that she paid. Is it taxable

Re: 1099 Misc

GiseleD — Sat, 01 Feb 2020 00:21:55 GMT

It is highly likely that she will have to pay taxes on this income. Can you provide some more details on why it was issued so that we can provide guidance on how to enter it?

Re: 1099 Misc

Jim1959 — Mon, 03 Feb 2020 02:57:48 GMT

It was part of a lawsuit settlement by large group of employees that were over paying for health care insurance.

Re: 1099 Misc

DavidS127 — Mon, 03 Feb 2020 14:30:30 GMT

Typically, a lawsuit settlement payment reported on a 1099-MISC amount is for attorney's fees, punitive damages, emotional distress, other physical injuries, and prejudgement interest. Depending on the nature of this payment, it may be taxable.

This IRS Publication 4345 on Settlements Taxability has the specifics on what portion of a lawsuit settlement you must include as taxable income. Use it as a guide for how to answer TurboTax questions about your wife's 1099-MISC.