Settlement

[mightmen16]

My client was fired from his job unfairly. He got a lawyer went to court and sued for the 2 years that he was unemployed. He won the case and received full pay for the 2 years that he did not work.
He brought me the copy of the court decision. Does he have to pay social security and tax on this money or just tax? where would I put it on the return?

[Kram BergGold]

If there is no personal injury it is taxable on Schedule 1 line 21. If discrimination is involved, it is taxable on line 21 but legal fees might be allowed above the line.