Disability Insurance Settlement Question

tonyche · ‎March 31, 2022

I received a disability insurance settlement in 2021 for which I received a 1099-Misc. I know this income is taxable, but when I get to the question "Did the insurance settlement involve an intent to earn money?", I am don't know what the correct answer is.

JohnW152 · ‎March 31, 2022

Answer No.

When you receive a Form 1099-MISC, the IRS needs to know if there was a profit motive behind the income

Answering Yes would suggest that this is self-employment type income, which would subject you to self-employment tax, and that shouldn’t be triggered with disability income.

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JohnW152 · ‎March 31, 2022

Answer No.

When you receive a Form 1099-MISC, the IRS needs to know if there was a profit motive behind the income

Answering Yes would suggest that this is self-employment type income, which would subject you to self-employment tax, and that shouldn’t be triggered with disability income.