I am on H1 and I changed Job in 2020 Dec. previous employer did not settle my leaves and travel expenses and got W2 and this year April he paid everything after pushing him and gave 1099, is this valid can I submit this in my tax filing or Will I get into trouble with IRS and USCIS
No issues with IRS. You will need to report 1099 on your return next year. Is it 1099-MISC other income?
The only downside is your travel expenses which should be ‘reimbursement’ if reported on W2 are not taxable however if paid via 1099-MISC other income will be considered as income resulting in extra tax liability.
With USCIS though, 1099s are a bit of an issue as they are normally issued to independent contractors and H1B are only expected to receive W2 from their employer. IRS & USCIS do not talk to each other so I dont believe there is a good way for USCIS to know that your received 1099 however even if USCIS finds out about your 1099, you can explain the reason.
I suggest getting a letter from your employer stating that they settled the dues as of (your job termination date) when you left your job with them. Letter should also mention that the settlement was made after few months of you leaving and that is why the payment was made via 1099. Also letter should mention the amounts for leave and travel separately. Copy of this letter can be provided to USCIS if they raise a question re: 1099.