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1099-MISC Reporting: Settlement Payments Made Directly to Clients
February 26, 2025
Q. If a settlement payment is paid to the client instead of the attorney, where does that amount go on the 1099? Is it still box 10 on the 1099-MISC?
A.
(Answered by IOFM's third-party tax advisor)
In this case, there would be no box 10 reporting. Box 10 of 1099-MISC is for lawsuit settlements paid to an attorney (or that flow through an attorney; at any rate the money goes to the law firm). If payment was made directly to the other party you would need to determine if the settlement is taxable…
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