I received 2 checks in Dec. 2013 as a class action settlement. Both checks were in the same amount: however, one check was for back wages and was reported and taxed on my w-2. The other check was for liquidated damages, designated as non taxable wages.

Early Feb. 2014, I received a w-2 reflecting the back pay check with my regular income, but nothing for the liquidated damages check. I filed my taxes with the AARP tax assistance group and was told I would not receive a 1099 for this and that it would not be taxed. I subsequently received a 1099-Misc with the liq. dam. reported as "Nonemployee Compensation". AARP volunteers and I are not sure how to handle this.