| Can an employer issue a payroll check and file a W-2 for payment of a personal injury settlement? | |
|
|
| Usually firms issue a 1099 Misc form to indicate a personal injury settlement payment was made but not a W2 showing it as wages. You should insure you have a settlement document that delineates what payment you received. Was it back or future wages and emotional distress or some other personal injury. The settlement document should state the employer will issue a 1099-Misc, and not a W-2. Note that the IRS does not accept emotional distress settlements as a non-taxable item unless there is proof of some physical damage supported by medical documentation. Also, any complaint you make in an employment situation should, if relevant, allege damages of some physical infirmaties where you sought and received treatment and the settlement papers should delineate what part of the settlement was allocated to the physical injury. |