I received a 1099-Misc (Box 7) for pension benefits awarded in a divorce settlement; is this considered business income that adds business taxes or personal income?

[PatriciaV · Accepted solution]

No, pension benefits awarded in a divorce settlement would not be business income. Instead, this income would be reported as Other Income on Form 1040 Line 21 (personal income.)

When you enter Form 1099-MISC in the Miscellaneous Income section, you may choose either "lawsuit settlement" or "None of these apply." Answer the subsequent questions as accurately as possible for the best outcome in your tax situation.

To find this section, search on "1099-misc" and jump to that section to begin.