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What type of settlement did you receive?
Per IRS:
Awards and settlements can be divided into two distinct groups to determine whether the payments are taxable or non-taxable. The first group includes claims relating to physical injuries, and the second group is for claims relating to non-physical injuries. Within these two groups, the claims usually fall into three categories:
All I received is a letter with a check attached from Philips Respronics to settle a recall. Do I even have to report this income?
You would not have to report the income unless you received an economic gain from it. If the settlement was intended to reimburse you for an expense you incurred previously, then it is not taxable. If it was more than an expense you incurred, then the portion that was more than your expense would be taxable.
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