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Level 1

Solved

Do I claim a class action settlement?

Forum|Forum|7 years ago
June 1, 2019
1 reply
0 views

The amount received was under $200.

TurboTax Deluxe Online

Best answer by

Yes, legal settlements are reported as "Other Taxable Income."

You may or may not receive a 1099-MISC reporting the income. Regardless, this is how you should enter it:

Click on Federal Taxes
Wages & Income > I'll choose what I work on.
Other Common Income section, click Show more
Form 1099-MISC, click on the Start/Update
Did you get a 1099-MISC?, click Yes
Let's get the info from your 1099-MISC, box 3 Other Income, click Continue
Describe the reason for this 1099-MISC, click Continue
Select This was money from a lawsuit settlement on the Does one of these uncommon situations apply? screen and then answer the back wages question before clicking Continue.

A

Anonymous

Answer

Yes, legal settlements are reported as "Other Taxable Income."

You may or may not receive a 1099-MISC reporting the income. Regardless, this is how you should enter it:

Click on Federal Taxes
Wages & Income > I'll choose what I work on.
Other Common Income section, click Show more
Form 1099-MISC, click on the Start/Update
Did you get a 1099-MISC?, click Yes
Let's get the info from your 1099-MISC, box 3 Other Income, click Continue
Describe the reason for this 1099-MISC, click Continue
Select This was money from a lawsuit settlement on the Does one of these uncommon situations apply? screen and then answer the back wages question before clicking Continue.

Level 2

Most class action lawsuit settlements do not send a 1099-MISC, if you did not receive one and follow this answer, it will show a red exclamation point error, asking for EIN or SSN which one is not going to have if they don't send a 1099-MISC.

To resolve, follow instructions in following answer.

https://ttlc.intuit.com/questions/4324380-i-recieved-a-class-action-lawsuit-settlement-from-fedex-corp-in-the-aount-of-17899-62-the-lawyers-got-7474-19-and-i-got-10445-79-what-am-i-responible-for">https://ttlc.intuit.com/questions/4324380-i-recieved-a-class-action-lawsuit-settlement-from-fedex-corp-in-the-aount-of-17899-62-the-lawyers-got-7474-19-and-i-got-10445-79-what-am-i-responible-for

Basically type in lawsuit settlement in search box, then Jump to lawsuit settlement link in box that pops up and fill in the info. The info entered carries over to your schedule 1 line 21 and then 1040 line 6 just like this method but no errors.