Pay Estimated Tax by Dec 2001 or Wait until 2002?

In CA, I received the settlement check from an employer who discriminated against me because of my "disability" because they cancelled my interview when they found out about me.
There were no tax deductions for both state and federal and I will get 1099 statement in Jan. 2002. My question is:
should I do estimated taxes by Dec. 2001 for both state and federal - or - should I wait until I receive 1099 statement in Jan. 2002 and then pay taxes? Please advise. Thank you.

First of all, are you certain the settlement is taxable, and if it is, is all of it taxable or only a portion? If it is all or partially taxable, then you realized the income for tax purposes at the time you received the check. If your withholding and other estimated tax payments would not cover the added tax on the amount that is taxable, you should file estimated tax to cover it. If you received the payment after May 31, the estimated tax payment is due Sept 15. If you received the payment before June 1, send the estimated tax payment as soon as you can. Here are the rules for taxablility:

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. Include the following as ordinary income.

Interest on any award.

Compensation for lost wages or lost profits in most cases.

Punitive damages.

Amounts received in settlement of pension rights (if you did not contribute to the plan).

Damages for: Breach of contract, or Interference with business operations.

Back pay and damages for emotional distress received to satisfy a claim under Title VII of the Civil Rights Act of 1964.

Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments).

Emotional distress. Damages you receive for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness. Do not include them in your income. If the emotional distress is due to a personal injury that is unrelated to a physical injury or sickness (for example, employment discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders.