Per IRS Publication 17 Your Federal Income Tax (For Individual), page 96:
Court awards and damages.To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. The character of the income as ordinary income or capital gain depends on the nature of the underlying claim. Include the following as ordinary income.
Don't include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments).
If you find you need to enter a description and an amount for IRS Schedule 1 (Form 1040) Line 8:
When you print your return, the text See Attached will print to the left of Line 8on IRS Schedule 1 (Form 1040). An attached sheet will print with the return titled Other Income - Supporting Details for Schedule 1 (Form 1040), Line 8 which will print both the description and amount that was entered.
For more information, see also IRS Publication 525 Taxable and Nontaxable income and IRS Publication 4345 Settlements - Taxability