Legal Fees deduction to obtain SS Disability

[Consultant]

Are legal fees deductible above the line on Schedule 1 (write in on Line 22)
to the % extent that SS Disability is taxable?

[TAXNJ]

Not knowing your scenario but see if this applies (source: TTB 3-17)

Lawsuit Settlements and Awards

• All interest on awards is taxable.
• All punitive damages are taxable except in certain wrongful death actions.

The taxpayer should receive Form 1099-MISC reporting any taxable punitive damages or other amounts.

Car accidents and other personal injuries. Compensatory damages received for personal physical injury or sickness are not taxable, including damages for loss of wages or earnings, loss of earning capacity, and for emotional distress caused by a physical injury or sickness. (IRC ?104)

Compensatory damages are amounts paid to compensate for actual loss or injury. Punitive damages, on the other hand, are intended to punish or make an example of the defendant.

Emotional distress. Damages for emotional distress are taxable if not caused by physical injury or sickness. Damages are taxable even if the emotional distress causes physical symptoms.

Exception: Damages up to the cost of deductible medical care are excluded from income. ( Pettit, T.C. Memo. 2008-87)

Other claims. Whether a settlement or award is taxable depends on the item the settlement replaces. If the item replaced would be taxable income, the settlement or award is taxable.

Legal fees and court costs. For tax years 2018 through 2025, miscellaneous itemized deductions subject to the 2% AGI limitation are not allowed. Therefore, most legal fees and court costs cannot be deducted. These costs cannot be netted against the settlement.

Exception: Unlawful discrimination claims. A taxpayer may be able to deduct, as an adjustment to income, attorney fees and court costs for actions settled or decided involving a claim of unlawful discrimination, limited to the amount of judgement or settlement included in income. See Write-In Adjustments, page 3-19 .

[New York Enrolled Agent]

Are legal fees deductible above the line on Schedule 1 (write in on Line 22)
to the % extent that SS Disability is taxable?

To answer your specific question - NO

They fall under the section 67 2% cut miscellaneous deductions. See Rev Ruling 87-102
Thus for 2018-2025 they are not deductible.