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1099 reporting of settlements to attorney and claimant
December 1, 2022
Q. Recently, we had to pay settlements to an attorney and to a claimant. This does not happen too often. So would both the attorney and claimant receive a 1099-MISC form instead of a 1099-NEC form?
A.
(Answered by IOFM's third-party tax experts)
An answer depends on what type (or types) of legal damages the settlement addressed, and to whom the settlement is made payable. Some types of settlements are excluded from income and for that reason not reportable to the claimant. Many settlement…
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