How Do I Enter Taxes Withheld from a Class Action Lawsuit Settlement
My wife & I both received checks from the settlement of a Class Action lawsuit. The lawsuit had to do with the retirement program offered by our former employer. Federal taxes were withheld from both of our settlement checks. I thought that I'd enter this income as Other Income but that option doesn't provide me with an option to enter the federal tax withheld. How do I enter the taxes withheld? Should I be entering this income somewhere else?
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FYI we didn't receive a W2 or 1099 form for these payments
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If you had taxes withheld, you were required to be issued a 1099. Contact the payer and ask for it.
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I believe a 1099 is only issued if the amount is greater than $600 & my amount was just under $600. I tried calling the phone number provided & the message said that the settlement agency was shut down.
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Not true. A 1099 is required if any Federal income tax was withheld, irrespective of the amount of the payment.
That said, do you have verification that Federal income taxes withe actually withheld from your distribution? Unless you're subject to backup withholding, it's very rare to have Federal taxes taken out on a 1099-MISC. Was any of this settlement related to back wages? If so, they should have issued a W-2 for that portion of the settlement.
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