Amendment - Self employment tax on 1099-MISC

[unclesamiamnot]

I received some money as part of a class action lawsuit settlement from a former employer. The amount was split equally into two separate forms - a W2 and a 1099-MISC.

When I filed my taxes, right after I clicked on the button to submit the taxes, the amount of refund reduced significantly. Afterwards I noticed that Turbotax added a self employment tax, even though I was not self employed. I believe I shouldn't have to pay self employment tax on the 1099 income.

So, I would like to file an amendment, but not sure how to fix this issue. 

I have tried deleting the 1099 MISC and re-adding it twice, making sure it's under "other income". Each time, I selected "lawsuit settlement" for the reason for the 1099. I wasn't quite clear on the "back wages" question, because I believe the W2 covers the back wages and the 1099 does not, however the wording is whether the settlement includes back wages. In any case, I tried selecting "yes" the first time and "no" the second time but each time TurboTax is still adding the self employment tax. The 1099 only lists the amount I received in box 3 (other income) and the rest of the fields are either blanks or show $0.

I would appreciate any help! Thank you.

[LenaH]

To get input from a 1099-MISC to flow to Other Income, please follow the instructions below:

1. Open or continue your return.
2. Navigate to the 1099-MISC section:
   • TurboTax Online/Mobile: Go to 1099-MISC.
   • TurboTax Desktop: Search for 1099-misc and select the Jump to link.
3. Delete the 1099-MISC entered. 
4. Enter a new 1099-MISC.
5. Enter Lawsuit as the reason for this 1099-MISC.
6. On the page, Do one of these uncommon situations apply? Click on, This was money from a lawsuit settlement. Enter no for the question on back wages.
7. Click Continue.

If this does not work for you, please clear cache and delete your cookies before deleting and reentering if using TurboTax Online. 
 

[Opus 17]

Although you may need to confirm this with the attorney:

It sounds like there is a wage portion reported on a W-2 and a non-wage portion reported on a 1099-MISC.  That means you should answer "not wages" for the 1099 portion. 

Also note, that in some cases, the 1099 portion might be completely non-taxable.  For example, if you were injured at work, and received compensation for the injury plus lost wages, the injury compensation is almost never taxable at all, even if it is reported on a 1099.  We would need to know more about that to help you further.