Where you enter a taxable legal settlement depends on whether it was reported on a Form 1099-MISC or not. Note that interest earned on settlements is taxable income and should be entered as a Form 1099-INT.
To enter a settlement reported on a 1099-MISC:
- Continue your return in TurboTax Online. (If your return isn't open, you'll need to sign in and click Take me to my return.)
- Click My Account (top right of your screen).
- Select Tools.
- In the pop-up window, select Topic Search.
- In the search bar, type 1099-misc.
- In the results box, highlight 1099-misc, then click GO.
- Answer Yes to the question Did you get a 1099-MISC?
- Fill out the boxes from your paper 1099-MISC and then click Continue.
- On the Does one of these uncommon situations apply? screen, select This was money from a lawsuit settlement and then answer the back wages question before clicking Continue.
To enter a settlement not reported on a 1099-MISC:
- Continue your return in TurboTax Online. (If your return isn't open, you'll need to sign in and click Take me to my return.)
- Click My Account (top right of your screen).
- Select Tools.
- In the pop-up window, select Topic Search.
- In the search bar, type lawsuit.
- In the results box, highlight lawsuit settlement, then click GO.
- Answer Yes to the question Any Other Taxable Income?
- Enter a brief description and the amount you received and click Continue.
Note: If
using the TurboTax CD/Download software, you'll use the Find function (instead
of "My Account") to search for the topic.
Please see the FAQ below for more information.
Are legal settlements taxable? https://ttlc.intuit.com/replies/4787698
