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Tax Reporting for Class Action Settlement Payments Made to an Administrator
August 13, 2025
Q. We have a class action settlement payment to be made payable to a neutral third-party Administrator. The plaintiff is a former employee and settlement is related to unpaid wages. Administrator will distribute individual payments to: Plaintiff for Class Representative Services and for individual class payment, Class Counsel fees and expenses, Administrator expenses, each participating Class Member, and PAGA payments. How is tax for each of these payments reported (1099/W2) when we are making…
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