My former employer issued a 1099misc for the part of the legal settlement that was non-taxable. is this incorrect?

meengreen · ‎June 1, 2019

Vanessa · ‎June 1, 2019

Why was it not taxable?

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meengreen · ‎June 1, 2019

The wages portion of the settlement (taxable) was covered in the wages W-2. The agreed non-economic damages was covered in a 1099 as non-employee income.

meengreen · ‎June 1, 2019

Please excuse my typo. The settlement agreement states that this portion is for "personal Injury and emotional distress" Does that matter?

Vanessa · ‎June 1, 2019

Non economic damages are taxable. So yes, they should have issued you a 1099 Misc for this. This part is not subject to FICA taxes, but it is subject to regular income tax.

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meengreen · ‎June 1, 2019

Please excuse my typo. The settlement agreement states that this portion is for "personal Injury and emotional distress" Does that matter?

meengreen · ‎June 1, 2019

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My former employer issued a 1099misc for the part of the legal settlement that was non-taxable. is this incorrect?