I have a 1099-NEC from a lawsuit settlement. I tried uploading it and it says missing info. I have put in all the info I can. I am not sure what else to do?

[DianeW777]

Entry depends on whether this settlement was for wages or something else. Since the income is issued on Form 1099-NEC my instruction will assume it was for back pay or wages.

Any part of the 1099-NEC that is for back wages and allowed to be issued in that manner must be included as income on Schedule C.

Social security and medicare taxes are required to be paid on compensation, i.e., this income. based on the document received (Form 1099-NEC). This is assumed due to the way it was reported.  If this was not back wages, then another approach can be used.

You can use these steps to report your settlement from a lawsuit. The steps will report the lawsuit 1099-NEC adding any taxes.

1. Federal > Search (upper right) 1099nec > Click the Jump to... Link to proceed.
2. Fill in info from the 1099-NEC
3. Describe the reason for the 1099-NEC as Lawsuit Settlement
4. Does one of these uncommon situations apply? check This was money from a lawsuit settlement
5. Answer Yes Was any part of the lawsuit settlement for back wages?
6. Enter the amount that was for back wages

Please update here if you need further assistance.

[janlembo65]

None of the amount I received was for lost wages.  I am retired.  I also had to repay Medicare from the amount on tthe 1099-NEC.  None of this money is taxable, but I can't make turbo tax do that.   Do I omit the 1099-NEC 

altogether, or do I put the negative somewhere els.

[JamesG1]

I do not recommend omitting the form. 

Since the payment is recorded on a 1099-NEC, I presume that the issuer believes that the income is taxable income, perhaps self-employment income.

I do not know the nature of the settlement.  Perhaps the intent was for the income to be reported and offset by the repayment to Medicare?

I have seen reimbursement of health insurance premiums reported on 1099-MISC box 3.  Is your situation similar to that?

[janlembo65]

NO,  Skechers paid me with two checks.  One for Skechers and one for paying off Medicare  The total combined was $8500.00 which is in Box 1 of 1099-NEC.  Where can I deduct this amount as untaxable.  I see that several people are having the same issue.  

[ThomasM125]

If you are sure the amount is not taxable, you can report the form 1099-NEC in the Other Common Income section, then Income from form 1099-NEC. Then, you enter an adjustment to income as a negative amount to cancel out the income you reported.

To enter the adjustment, follow these steps:

 Go to the Income and Expenses section of TurboTax

 - Choose  Less Common Income

 - Choose Miscellaneous Income, 1099-A, 1099-C

 - Choose Other reportable Income

 - Enter a description and the amount of your adjustment as a negative number

@Janlemo65

[MaxLohMusic]

This is ridiculous. If you report a 1099-NEC via other common income, pick "Lawsuit settlement", then say "No" to the question about wages, it will always say "MISSING INFO".

If, like many commenters here suggest, lawsuit settlements belong in "other income", then TurboTax should fix that issue and make these answers go into the "other income" bucket, not "MISSING INFO". There is no info missing; every question prompted by TurboTax regarding this form has been answered.

[rmholmes9696]

 If you report a 1099-NEC via other common income, pick "Lawsuit settlement", then say "No" to the question about wages, it will always say "MISSING INFO".

If, like many commenters here suggest, lawsuit settlements belong in "other income", then TurboTax should fix that issue and make these answers go into the "other income" bucket, not "MISSING INFO". There is no info missing; every question prompted by TurboTax regarding this form has been answered.

Has this been fixed?  Do I report it in different Catagory?  I need to pay tax on this and unsure what I am doing wrong???

[DawnC]

Says YES (even though the answer is NO) to the back wages question, then enter $0 for the amount of back wages.   That will report the amount as Other Income.  @rmholmes9696 

[klkaylor]

I agree that the work flow on this leaves up open for "non matched income" with a 1099-NEC reporting $$ to the IRS and our filing not showing that money.  I think the workflow should be changed to enter all the data on the 1099-NEC - payer/numbers act and the appropriate lines just like any other form. Then the work flow can ask if a law suit - yes- back wages amount and then transfer that number to the correct spot on the forms/worksheet.  Just not reporting the $$$ is risky when computers are just matching numbers.  I never want to have to explain something to the IRS - any question open the lid to other questions.  I have the same issue with rent miss reported on a 1099-NEC v. 1099 MISC -  Can't Turbo tax make a workflow for that issue?