TurboTax FAQ
TurboTax FAQ
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Where do I enter an award from a taxable legal settlement?

Legal settlements that are taxable (including previously-deducted medical expenses related to physical injury or illness) are entered as miscellaneous (other) income.

When you received a 1099-MISC, follow these steps to report the income:

  1. Open (continue) your return in TurboTax.
  2. Type “1099-misc” in the Search box and then select the “Jump to” link.
  3. Answer Yes to the question Did you get a 1099-MISC?
  4. Fill out the boxes from your paper 1099-MISC and then click Continue.
  5. 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.

 If you didn’t receive a 1099-MISC, follow these steps to report the income:

  1. Open (continue) your return in TurboTax.
  2. Type “lawsuit settlement” in the Search box and then select the “Jump to” link.
  3. Answer Yes to the question Any Other Taxable Income?
  4. Enter a brief description and the amount you received and click Continue.

Interest earned on settlements is taxable income and should be entered as a Form 1099-INT.

Related Information:


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