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    #1

    Class action suit settlement

    Client was contacted by law practice regarding a class action lawsuit against an employer. She participated in it and received $90 settlement. The sent her a 1099 INT with $90 in box 1. They then sent her a 1099 MISC with $92.05 in box 3. She also received a W-2 with $90 as wages in box 1 and taxes were withheld. This lawsuit was filed in CA (don't know if that has anything to do with it) and client lives in OK. She only received a one time payment of $90. I don't understand why she has received all these different forms with the same amount on it. Can anybody out there help me with this? Thanks for your help in advance.

    tsw
    Tags: None
    #2
    I can only guess, but three possibilities come to mind:

    (1) She is mistaken about how much she received.
    (2) Retaliation on the part of the employer ... unlikely, but possible.
    (3) Two of the forms were corrections of other forms that the company determined had been issued in error.

    $90.00 and $92.05 are not exactly the same amounts, so it's possible the settlement consisted of three parts ... interest, wages, and something else.

    Has she asked the lawyers who handled the case? They might be able to clear up the mystery real fast.
    Roland Slugg
    "I do what I can."

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      #3
      Interest, back wages, and punitive? With the lawyers keeping 2/3? Or, one of the checks came long after the other, so you client forgot receiving two payments? Ask your client to ask the lawyer.

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        #4
        I have had a few - Calif based, that I received a W-2 through the Attorney with that EIN #, and then a 1099 misc, but have been able to track. T/P has had no questions.

        The latest one I remeber, was California based Wages - deducted all of the Federal and Calif Withholding tax, but then issued a separate 1099M for the Calif SDI - made no sense to me, but was nominal in $ so did not question.

        Sometimes, there is interest on the amount, but that should not be on a 1099 Misc

        Calif settlements are pretty common on Employer issues class action, so maybe take a closer look at the documents, or you or the client contact the attorney.

        Sandy

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          #5
          Class Action Law Suit Settlement

          So, I'm wondering since CA is listed on W-2, will I need to file a CA return? Thanks in advance.

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