Question

1099-nec, how to answer questions for a nonwage, class action settlement payment under $600?

Forum|Forum|3 years ago
March 1, 2023
1 reply
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As executor of my parent's estate, I received a small settlement payment for a class action lawsuit against an investment company that went bankrupt. What do I enter in the turbotax 1099-nec portion so it will accept that the money is non-wages and that there is not missing info?

TurboTax Deluxe Online

DaveF1006

Since there is no section to directly enter a 1099 NEC in your return you will enter this in the other income or loss section in your return.

Go to federal taxes>income>other income or loss>other income or loss. In the description box, type in 1099 NEC and then the amount of the income.

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R

ra361Author

thanks, to be clear, this in not income by self-employment, not related to wages. My father invested and the company mishandled the money and then tried to file for bankruptcy. Years after he passed, I was sent under $200 as a final payment on his original money. I was sent a NEC, it maybe should have been an MISC? I just don't want to file it incorrectly and have my taxes flagged or rejected.

@ra361

DaveF1006

Yes, there is a correct way to report this.

Select Income & Expenses
Go to the  All Income section and select Other Common Income
Select Form 1099-NEC
You will then be prompted to enter your information as reported on Form 1099-NEC. Be sure to mark that it was not earned as part of business nor did you have an intent to make money.

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