Hi

The Small Claims Awarded $5000 for Terminating the Indep Contractor agreement without giving the 2 weeks notice.

I was employed through another company and was paid through that company - however, I was asked to leave w/o the required 2 weeks notice.

I aksed for the 2 weeks pay and wasn't granted.

So I went to the small claims directly bypassing the middle man.

Court ordered them to pay me the $5000 since that's the most the court can awards (it's less than the 2 weeks pay ).

Company then asked me to sign forms and I didn't.

Company later issued a 1099-MISC for this payment with all "0"s for my SSN?

Should I pay Self Employment Tax - I didn't offer any service for this $5k - they paid it as a damage?

Sciconf:

Since the award was made to compensate for lost earnings (in this case, self-employment income), you must treat it as self-employment income on your tax return.

So the answer is Yes, you should pay self-employment taxes on this award.