I received a 1099-MISC box 3-from an employment lawsuit. 1 advisor said I only need to report a % of it, another said the whole thing, someone else said not at all. Help?

[caitlin0419844]

Don't report at all: I also received a separate W2 from the same lawsuit for back wages, so some articles say due to this I don't need to report the 1099-misc. 

Report a portion: A reputable advisor explained that it is not non-employee income so it's better, I just need to pay the income tax not the SE tax, but I have no idea how to report that on here? Total is $11,000. I'm very confused, can anyone offer some help?

Report the whole thing as normal in box 3: An advisor at HR Block who was going on yahoo.com for her info and got very snippy trying to google answers online...I walked out b/c I wasn't confident they knew..

[Vanessa]

Number 2 or 3 could be correct, but it really depends on what all was included in box 3. 

 If part of it was for personal injuries or physical sickness or emotion distress related to either, that part is not taxable.

 Most other types of judgments are going to be taxable and the entire 1099 Misc will be reported on your return as non-employee compensation which is subject to regular income tax but not Medicare or Social Security tax. 

https://www.irs.gov/pub/irs-pdf/p4345.pdf

[caitlin0419844]

Silly question, but if I report it in box 3 will TurboTax auto deduct it as regular income vs medicare/SS or do I have to do something special?

[caitlin0419844]

And if all of it is for emotional distress, I don't report all of it?

[Vanessa]

If it is all for emotion distress you need to report it all unless it is due to a physical injury or illness.  The only time emotional distress is not taxable is if it is from a physical injury or physical illness.

It the emotional distress is for harassment or ANYTHING OTHER THAN the physical illness or injury then it is taxable.

[Vanessa]

When you put it in box 3 then you will walk through answer the questions and TurboTax will enter it on line 21 of your Schedule 1.  Nothing else special needs to be done.