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Reporting unpaid wages from a settlement to former employees
November 21, 2024
Q. We have some former employees, that will be receiving unpaid wages from a settlement. It is our understanding the wages are reportable, but on a 1099, not a W-2. Correct? Now it has been brought to our attention that the funds that were taken for benefits purposes will need to be reimbursed also. Should those funds be included in the tax reporting amount?
A.
(Answered by IOFM's third-party tax experts)
Any part of a legal damages payment your company makes to a former employee that is…
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