Nontaxable legal settlements do not have to be reported on your tax return.
In most cases, taxable legal settlements will be reported to you on a W-2, 1099-Misc or other IRS form.
Non taxable settlements do not go on your tax return. There is no where to report them, because the taxes have already been taken from your money during the settlement process. Don't worry, it's your money and they know it because the sender of the money reported it as a legal expense and company loss. Been there, done that. Double checked it with lawyers and tax accountant when it happened to me.
So, if you're sure the settlement is nontaxable, you don't need to report it on your return.
I received non taxable settlement from personal injury..I want to add it to my taxes..I tried to add it to “other income” as a negative amount in Misc but at the end TurboTax won’t let me file it electronically..where I can include it in my taxes so TurboTax won’t calculate taxes on it?