turbo tax is creating self employment tax on a 1099-misc for a settlement of back wages

Delete that 1099-misc and any erroneous Schedule C that may have generated.  

 

How to delete forms in TurboTax Online

 

How to delete forms in TurboTax Desktop

 

Then re-enter it as follows:  

 

1. On the uncommon situations screen, check the box for This was a lawsuit settlement.   
2. Answer YES to the back wages question.    

• Enter the amount in the box that was reported on a w-2.   
• If you did not get a w-2 with the 1099, enter 0.