Court Award

[Tax Sleuth]

Are courts required to report a taxable award to an individual to the IRS on a tax document, such as a Form 1099-MISC?

[Lion]

It's probably not the court who's paying the award. The company who has to pay the award might have a reporting requirement. If an individual is paying, they probably don't have a requirement to report on a Form 1099-MISC but might on a W-2 if it was a household employment issue, back wages or whatever.

[New York Enrolled Agent]

Are courts required to report a taxable award to an individual to the IRS on a tax document, such as a Form 1099-MISC?

You might want to read the ATG on lawsuits on the IRS site. A fairly full discussion on reporting.

One very small snip from Chapter 6 of the ATG: In lawsuit settlements, the person with the obligation to report payments to the plaintiff will generally be the defendant or its insurer rather than the plaintiff’s attorney. In addition, the defendant or its insurer will also generally be responsible for reporting payments to the plaintiff’s attorney.