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J
Jul21720
Level 3
February 11, 2021

compensation for lost wages due to car accident

  • February 11, 2021
  • 1 reply
  • 9 views

Is a compensation for lost wages due to a car accident subject to Social Security tax? if so, how do I enter it in Pro Series basic?

    This topic has been closed for replies.

    1 reply

    BobKamman
    BobKamman
    Level 15
    February 11, 2021

    If part of a claim for damages for physical injuries that actually happened, then the entire settlement is not taxable.  

      J
      Jul21720Author
      Level 3
      February 11, 2021

      Thanks BobKamman, would that be the reason the taxpayer did not get a form 1099?

      Taxpayer did receive money to pay for medical expenses and because she was out for 3 months, so; according to your message the compensation is tax free. Is there a Pub that you can refer me to? 

      Thanks, I appreciate your help.

       

      qbteachmt
      qbteachmt
      Level 15
      February 11, 2021

      Your client would get a W2, if this is Lost Wages replacement. You didn't tell us who paid for this.

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