Updated October 16, 2026. Quick answer: Box 10 of Form 1099-MISC shows gross proceeds paid to an attorney in connection with legal services, such as a settlement payment, and not the attorney’s own fee. It is numbered box 10 on both the December 2026 and the 2025 forms. The recipient instructions say to report only the taxable part as income on your return.
What box 10 reports
The recipient instruction: “Shows gross proceeds paid to an attorney in connection with legal services.” “Report only the taxable part as income on your return.” The word to notice is gross. The box total can include money that is not income to you. The form is mapped in the Form 1099-MISC overview and every box is listed in the 1099-NEC and 1099-MISC boxes overview.
The payer’s own definition of the term is in its instructions: “Under section 6045(f), report in box 10 payments that:” “Are made to an attorney in the course of your trade or business in connection with legal services, but not for the attorney’s services, for example, as in a settlement agreement;” “Total $600 or more; and” “Are not reportable by you in box 1a of Form 1099-NEC.”
Why a settlement check can produce box 10
A settlement is the usual cause. The instructions give a payer example: “For example, an insurance company pays a claimant’s attorney $100,000 to settle a claim. The insurance company reports the payment as gross proceeds of $100,000 in box 10.” That reporting happens even when the attorney is not the person who keeps the money.
The rule applies in several arrangements. “These rules apply whether or not:” “The legal services are provided to the payer;” “The attorney is the exclusive payee (for example, the attorney’s and claimant’s names are on one check); or” This is why a settlement paid on a single check made out to a law firm and a client can come with a box 10 for the firm.
Box 10 and box 3 can describe the same dollars
The instructions walk through damages paid to a claimant by way of the claimant’s attorney. “For example, a person who, in the course of a trade or business, pays $2,000 of taxable damages to a claimant by paying that amount to a claimant’s attorney is required to:”
“Furnish Form 1099-MISC to the claimant, reporting damages pursuant to section 6041, generally in box 3; and” “Furnish Form 1099-MISC to the claimant’s attorney, reporting gross proceeds paid pursuant to section 6045(f) in box 10.”
So the claimant may hold a box 3 form and the law firm may hold a box 10 form for the same payment. On the recipient side, “Generally, report this amount on the “Other income” line of Schedule 1 (Form 1040) and identify the payment.” The amount shown may be “taxable damages”, and box 3 is the box aimed at the claimant.
Gross is not the same as taxable: an illustration
The instruction to “Report only the taxable part as income on your return.” means the figure in the box is a starting point. As an illustration, not an IRS example: suppose box 10 shows $50,000 and the part of the payment that is taxable income to you is $20,000. Then $50,000 minus $20,000 equals $30,000 that is in the box total but is not what the instruction asks you to report as income. The form does not make that split for you, and the instruction does not set a rule for it.
Which part of a payment is taxable depends on what the payment was for, and the form leaves that to the return. A written settlement agreement, or the payer’s description of the payment, is the place to start. For the return itself, see the Form 1040 page.
Attorney fees are a different box
Box 10 is not where the attorney’s own fee goes. “Attorneys’ fees of $2,000 or more paid in the course of your trade or business are reportable in box 1a of Form 1099-NEC, under section 6041A(a)(1).” That is box 1 on the 2025 Form 1099-NEC. An attorney can receive both forms: box 1a for fees from a client, and box 10 for gross proceeds that pass through for a claimant.
“Generally, you are not required to report the claimant’s attorney’s fees.” “However, the insurance company does not have a reporting requirement for the claimant’s attorney’s fees subsequently paid from these funds.”
An attorney’s own fee income is a separate subject, and the business schedule is explained on the Schedule C page.
Law firms and corporations
A law firm that is a corporation can still receive the form. “The exemption from reporting payments made to corporations does not apply to payments for legal services.” “Therefore, you must report attorneys’ fees (in box 1a of Form 1099-NEC) or gross proceeds (in box 10 of Form 1099-MISC), as described earlier, to corporations that provide legal services.” The instructions exclude two things: “these rules do not apply to wages paid to attorneys that are reportable on Form W-2” or “profits distributed by a partnership to its partners that are reportable on Schedule K-1 (Form 1065)”.
If the form does not fit
If a form does not fit your facts, the recipient instructions give a path: “If this form is incorrect or has been issued in error, contact the payer.” “If you cannot get this form corrected, attach an explanation to your tax return and report your information correctly.”
A payer must also have the right name and number. “To report payments to an attorney on Form 1099-MISC, you must obtain the attorney’s TIN.” “If the attorney fails to provide its TIN, the attorney may be subject to a penalty”, and the payer must backup withhold. Box 4 would show that tax, and the recipient instruction for it is: “Report this amount on your income tax return as tax withheld.”
Edition and box numbers
The December 2026 revision of the Form 1099-MISC recipient copy and of the Instructions for Forms 1099-MISC and 1099-NEC was the primary read for this page. The April 2025 instructions and the 2025 recipient copy were read beside it, and irs.gov served both editions on 2026-10-16. Box 10 is numbered the same on both forms, and the 2025 instructions use the same payer threshold: “Enter gross proceeds of $600 or more paid to an attorney in connection with legal services”. The edition difference is the attorney fee box: it is box 1a on the December 2026 Form 1099-NEC and box 1 on the 2025 form, and the fee threshold was $600 in the 2025 instructions where the December 2026 text says $2,000. Check the revision printed on the form you received, because a box number or a payer threshold can differ between editions.
Common mistakes
- Reporting the whole box 10 total as income. The recipient instruction says to report only the taxable part as income on your return, and the box shows gross proceeds.
- Looking for the attorney’s fee in box 10. The instructions put attorneys’ fees in box 1a of Form 1099-NEC (box 1 on the 2025 form) and say box 10 gross proceeds are payments not for the attorney’s services.
- Assuming one payment produces one form. The instructions describe taxable damages paid through a claimant’s attorney as a box 3 form to the claimant and a box 10 form to the attorney.
Related: Form 1099-MISC overview, Schedule C (Form 1040), Form 1040, and Self-employment tax explained.
Sources
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026): https://www.irs.gov/pub/irs-pdf/i1099mec.pdf
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025): IRS archived PDF (irs.gov)
- Form 1099-MISC, Miscellaneous Information (Rev. December 2026), recipient copy: https://www.irs.gov/pub/irs-pdf/f1099msc.pdf
Read from the IRS documents linked above on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.