Reporting interest on a settlement for lost wages

July 16, 2020


Q. I have a situation where an employee was terminated but is receiving a settlement for lost wages. Since the employee is terminated, the payments were made through AP and not payroll, including a payment for interest. I'm unsure which form to use to report the interest payment. Should it be Box 3 of 1099-MISC, or should it be reported on a 1099-INT? From my research, it seems a 1099-INT would be for interest payments made in the course of your business, such as a bank or brokerage firm, and…

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