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Reporting a low-value legal settlement
July 31, 2024
Q. We are required to pay a legal settlement to our of our guests in the amount of 60 cents. I've always been under the assumption that all settlements require a 1099 be sent but wondered if one is less than a dollar if it has that same requirement. We have never had one for that amount before so I'm unsure how how to proceed.
A.
(Answered by IOFM's third-party tax experts)
Legal settlements that are taxable are reportable to the claimant in box 3 of the Form 1099-MISC if the aggregated amount…
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Naturally, this forum doesn’t allow the kind of full information exchange necessary for the Institute of Finance & Management (IOFM) to provide legal advice and the Expert is not a tax attorney in any event. Please understand that the nature of our responses are limited by these constraints as well as the site’s Terms of Use. If you have further questions or suggestions about how we can improve IOFM, please let us know.
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