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Reporting a settlement to an individual
November 10, 2021
Q. When paying a settlement to an individual person, is this reportable? And if so, what income code is used?
A.
(Answered by a 3rd party, independent advisory services firm offering experienced and practical help for tax regulatory compliance for Forms W-9, W-8, W-2, 1099, 1098, 5498, 945, 1042, 1042-S, and state reporting.)
To determine whether all or a portion of a settlement requires tax information reporting, it's necessary to identify what the settlement is for. Taxable legal damages…
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