I reported a wage-claim with Texas Workforce Commission in the year 2005 and by mid of 2005 Texas Workforce Commission ruled in my favor and asked employer to deposit money with Texas Workforce Commission. Employer did that at the same time it appealed to Texas Workforce Commission's determination order and asked that money be held in Escrow, and the amount they deposited with Escrow was after taxes. (For e.g. if Texas Workforce Commission determined they owed me 10,000 dollars before taxes then employer deposited only 6000 something in Escrow).
Now, In 2006 I am about to receive money from Escrow which was withheld with the court. I want to know how can I report my this income with IRS for tax refund if I am eligible for one and certainly I don't want to end up paying tax twice on the same amount. I doubt I would receive any W2 for the money received from escrow.
I know I have plenty of time from now till next year's tax return however, I would like to know it now and better be safe than sorry.
Thanks for your response in advance.