We have a settlement payment made to a law firm and report in Form 1099-MISC, Box 14 (Gross Proceeds Paid to Attorney).


Q. (cont.)

Does this payment also need to be reported to the recipient as income? If so, in which box?



We spoke with IRS information agent Ms. Tennett (ID # 1001307512) who said, yes, you would also need to report the gross amount of this payment to the claimant in box 3 of the 1099-MISC form.

You are correct that you would report this same gross amount to the attorney in box 14 on a separate 1099-MISC, assuming you do not know how much of the total payment was retained by the attorney.

Have more questions? Submit a request