Legal Settlements

In law, a settlement is a resolution between disputing parties about a legal case, reached either before or after court action begins.

Legal settlement approval and payment

All legal settlement at the University of Wisconsin must be approved and submitted for payment by the Office of Legal Services.

The payment mechanisms for making legal settlements at the University of Wisconsin are based on the nature of the action as follows:

  • If wages, payment is through Payroll and reportable on the employee’s W-2. Use one of the following account codes for wage related payments:
Code Number Description Type
1008 Salary Related Legal Settlements-Faculty/Academic Expense
1539 Salary Related Legal Settlements-Classified Expense
Code Number Description Type
1909 Non Salary Legal Settlements-Faculty/Academic Expense
1944 Non Salary Legal Settlements-Classified Expense

Note: After submitting a PIR payment for legal settlements, forward a copy of the PIR to the Tax Compliance Manager (Jose A. Carus, Jr.).

Reporting regulations

The UW reports all legal settlements per IRS, Program Manager Technical Assistance, Income and Employment Tax Consequences and Proper Reporting of Employment Related Judgements and Settlements, Oct. 22, 2008 as published in the IRS Federal Tax News on July/August 2009.

Download Legal Settlements (PDF)