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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I will be getting a financial settlement from a mediated claim

Customer Question

I will be getting a financial settlement from a mediated claim from my past employer. I was told I will be issued a w2 now and a 1099 at the end of the year. Will I need both forms for taxation on this financial settlement?
Submitted: 1 year ago.
Category: Finance
Expert:  Megan C replied 1 year ago.
Thank you for your question. My name is ***** ***** I will be happy to help you today :-)
Yes, you will need both forms - the W-2 is for your wage, and then the 1099 is for the taxable portion that is not a wage.
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Please let me know if you need anything additional -- if not please rate positive so that I may receive credit for assisting you today
Customer: replied 1 year ago.

there is NO wage. It is a lump sum settlement. This payment is not from work done, it is from a claim mediated by the eeoc in a discrimination case. That is why I ask the question.

Expert:  Megan C replied 1 year ago.
the W-2 portion is considered wages. If there was wage discrimination some may be wage.
The rest may be taxable, and that portion will be on the 1099
The answer is YES you will need the forms.
Customer: replied 1 year ago.

there was no wage discrimination???

Expert:  Megan C replied 1 year ago.
I was giving an example, not stating that it is what you have to deal with
However I have answered your question -- YES you will need the tax forms when they provde them to you
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Please let me know if you need anything additional. If not, please rate positive so that I may receive credit for assisting you today.

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