Form 1099-MISC
Form 1099-MISC is an IRS form a business sends to report certain payments to you, such as prizes, awards and other taxable damages.
Also called: 1099-MISC, 1099 MISC, miscellaneous information form
Form 1099-MISC is an IRS form a business sends to report certain payments to you, such as prizes, awards and other taxable damages.
What it means
Form 1099-MISC, Miscellaneous Information, is an IRS information return. A payer that is in a trade or business uses it to report certain payments it made to you, such as rents, prizes and awards, and other income. The payer gives you a copy and files one with the IRS.
Taxable damages are generally reported in box 3, Other Income. The IRS instructions say that includes punitive damages and damages for nonphysical injuries, but not damages for personal physical injury or physical sickness. For payments made after 2025, the box 3 threshold is $2,000, up from $600. A payer must also report gross proceeds of $600 or more paid to an attorney in box 10, for example under a settlement agreement.
The payer must furnish the form to you by January 31 and file with the IRS by February 28, or March 31 if it files electronically.
What it means for you
If you receive a Form 1099-MISC for settlement money, do not ignore it. The IRS gets a copy, so the amount should match what you report. Check that your name, tax ID and the amount are right, and ask the payer for a corrected form if something is wrong. A 1099 does not by itself decide whether money is taxable, and a missing form does not make taxable money tax-free. A settlement administrator may ask for a Form W-9 before it pays you, so it has your correct tax ID. A tax professional can help you report it.
Example
Say a settlement pays you a $2,500 award in 2026 for non-physical harm. The payer, which is in business, reports payments of $2,000 or more, so it sends you a Form 1099-MISC in January showing $2,500 in box 3. You compare it with your records, report the income as your tax professional advises, and keep the form with your settlement papers.
FAQ
A payer, such as the settlement fund or the company that paid it, reported a payment to you that it believed was reportable income, often damages in box 3. The IRS receives a copy of the same information.
A payment can be taxable even if no form arrives, because payers only have to file above reporting thresholds. Whether your payment is taxable depends on what it replaces, so a tax professional can look at your situation.
Related terms
- IRS, Instructions for Forms 1099-MISC and 1099-NEC
- IRS Publication 525, Taxable and nontaxable income (court awards and damages; recoveries)
Updated Oct 18, 2026. Plain-English definitions for general information — not legal or tax advice.