I received a 1099-K for a 3M earplug lawsuit for income that shouldn't be taxed. How do I report the form without getting taxed on it.

[ThomasM125]

If you believe the income is not taxable, you can enter a negative adjustment to income to cancel it out as follows:

1. From the Federal menu in TurboTax find Wages and Income 

2. Find Less Common Income

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

4. Choose Other Reportable Income

5. Enter a description of the adjustment and the adjustment as a negative number

As a rule, judgement proceeds are taxable unless they are intended to compensate you for injury or sickness. You may want to review this IRS article to help determine if your award is taxable.

[mmt081508]

Great thank you! Just for anyone else in the community this was for the Military 3M Earplugs lawsuit to compensate for hearing loss and tinnitus damages caused by faulty earplugs and should not be taxed. I received a 1099-K from PayPal