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New Member
posted Feb 14, 2020 10:45:54 AM

During this tax year I received payment as part of class action suit. Payment included gross wage, award and interest. What of this is reportable and where?

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1 Best answer
Expert Alumni
Feb 14, 2020 11:24:08 AM

For legal settlements and awards, the following is taxable:

 

  • All interest on awards is taxable
  • All punitive damages are taxable except in certain wrongful death actions
  • Because the gross wages are replacing a taxable item, they are taxable 

You can enter the settlement in Other Income. See these directions.

1 Replies
Expert Alumni
Feb 14, 2020 11:24:08 AM

For legal settlements and awards, the following is taxable:

 

  • All interest on awards is taxable
  • All punitive damages are taxable except in certain wrongful death actions
  • Because the gross wages are replacing a taxable item, they are taxable 

You can enter the settlement in Other Income. See these directions.