[ruthies50]

I recently won an Arbitration Award due to FMLA misconduct by my ex-employer, they paid me in 2008, yet sent me a 1099 saying they paid me in 2007, which they did write the check in 2007, but was not receieved until more than a month later. Am I going to be paying a great deal in taxes? One person says I do not have to pay since it is actually considered medical and another one says I do since it does not matter how it is reported, just that it is reported.

[xphelper]

Hello,

I used to work an an affiliate of a large corporation (but not actually employed by them) and they reported all my earning as "non-employee compensation" and all of that income was taxable under the IRS code. I'm guessing you income was reported that way as well because you were no longer employed by that company at the time of your award; however, it is always best to check with a tax professional to be sure.

[AtlantaTaxExpert]

If the check is written in 2007, that is the year it gets taxed in.

That said, I believe that the income IS taxable because it replaces lost wages that would have been taxed had they been paid.

But go to the appointment with the tax pro and tell us what HE/SHE said.

[ruthies50]

Thanks! Here's what I found out: The check was written in 2007, however, not available to me until 2008, therefore the tax year for this award is 2008. I do have to pay taxes on the total amount, including the attorney's fees and costs. However... I can use those as deductions, which helps my cause a little bit anyway. So now, just waiting for the "tax man" to figure out the exact amount that I need to pay in so I can get this over with and go on with life... :D I had planned on keeping it in the bank and letting it give me a bit of interest, but the IRS mentioned early payment that would help save me a great deal in interest... works for me.

Again, thanks for the great answers! You guys rock!