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Level 1
posted Feb 9, 2024 10:00:05 AM

I received 1099MISC for settlement, along with a W2 - the amounts differ

I received 1099MISC for a settlement, a portion of the settlement was unpaid wages. I also received a W2 for the upaid wages which were taxed before I received the final amount and this is indicated on the W2. The amount on the 1099MISC is different from the amount on the W2 due to the rest of the settlement not pertaining to wages. How do I correctly enter these forms?

When adding the 1099MISC, one of the questions asks if the the settlement is unpaid wages. 

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1 Replies
Expert Alumni
Feb 9, 2024 10:09:42 AM

Yes, enter both forms as they are reported. The W-2 represents payment for back wages. 

 

The 1099-MISC probably contains taxable income from proceeds that were punitive in some form.

 

When entering the 1099-MISC, indicate that the form was received from a lawsuit and the amount (if any) that represent back wages.  You won't be taxed twice on the wages.