1099 NEC for Settlement

[pjjanzen]

I was part of a settlement for missing wages.  I was paid for those wages in two separate checks.  The first check was for the missing wages and the second check was for the settlement.  I recieved a w-2 for the wages check and a 1099 - NEC for the settlement check.  I entered the w2 as normal.  When I enter the 1099 I am saying that it was for a settlement but that amount was not for wages.  I then get a error message stating something is missing.  But nothing else is missing.

[DianeW777]

It depends what the second check was actually for.  You indicated that it was also wages, or income which may mean it was extra earnings not originally included. Follow the instructions about how to enter it and then the missing information may go away.

If it was for earnings like wages, then it must be reported like self employment because of the form it was reported on - 1099-NEC,.

• How do I report income from self-employment?

If you believe this is not self employment income, meaning it was not for a service you performed, then you can enter it as a legal settlement. Read more details in your settlement documents to be sure.

• Where do I enter the award for a taxable legal settlement?
• Are legal settlements taxable?

Please update here if you have more questions and we will help.