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Question
I received a 1099 for $425 as part of a class action settlement/ under the reportable $600 to the IRS. Since was a class action including 100s of plaintiffs, do I still need to report this 1099 as specified in the settlement agreement court document?
AI accountant’s answer:
Yes, you likely still need to report that class action settlement. Class action settlements are taxed the same as lawsuits. Certain types of class action settlements (and lawsuits) my be exempt from taxation, but class action settlements are more typically taxable.

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Answer
Yes, you likely still need to report that class action settlement. Class action settlements are taxed the same as lawsuits. Certain types of class action settlements (and lawsuits) my be exempt from taxation, but class action settlements are more typically taxable.

No answer given yet!

Melissa Pedigo, CPA

Melissa Pedigo has been a CPA for over 20 years and she is one of the only CPA copywriters in the world. With a vast knowledge of U.S. tax and accounting, she’s able to write about tax and finance topics from a unique perspective...as an industry expert. When she’s not writing or being an accounting nerd, you’ll find her watching and playing tennis, reading, tending to her half-grown garden, and studying foreign languages

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