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How To Enter Social Security Windfall Repayment for Tax Year 2025

Forum|Forum|4 months ago
February 2, 2026
3 replies
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In March 2025 my wife received a lump sum repayment from the SSA as part of the Windfall Elimination Provision. Her 2025 Form SSA-1099SM states that the amount shown in Box 3 (Benefits Paid in 2025) includes the windfall repayment amount "paid in 2025 for 2024". Since the windfall payment amount is already accounted for in Box 3 of our 2025 Form SSA-1099SM, do we answer "yes" to the TurboTax question, "Did you receive any lump-sum payments?" I don't want the windfall repayment counted twice for my income. Thanks!

TurboTax Deluxe Online

Best answer by CatinaT1

Yes, you should answer "Yes" to the question "Did you receive any lump-sum payments?" in TurboTax. Answering "Yes" does not double-count your income; instead, it triggers a special IRS calculation known as the Lump-Sum Election, which can actually reduce your tax bill.

When you receive a lump-sum payment for a prior year (like the 2024 windfall repayment received in 2025), the IRS requires the full amount to be reported in the year you received the check. However, they allow you to use the "lump-sum election" method to prevent that large payment from pushing you into a higher tax bracket.

TurboTax uses the total from Box 3 as your starting point. When you select "Yes," the software will ask you to break down how much of that Box 3 amount was for 2024. It then recalculates your 2025 tax as if that portion had been received back in 2024.

If your income was lower in 2024 than in 2025, or if the lump sum would make more of your Social Security taxable this year, this election ensures you only pay the amount of tax you would have owed if you had received the money on time.

TurboTax will run the numbers both ways—taxing it all in 2025 versus using the lump-sum election—and will automatically apply the method that results in the lowest tax for you.

To complete this section accurately, have your 2024 Tax Return handy. TurboTax will ask for:

The specific portion of the 2025 payment attributed to 2024 (found in the Description of Amount in Box 3 on your SSA-1099).
Your 2024 Filing Status.
Your 2024 Adjusted Gross Income (AGI).
Any Tax-Exempt Interest you reported in 2024.

Follow these steps to ensure the election is applied:

In the Social Security (SSA-1099) section, enter the full amounts exactly as they appear on your 2025 form.
On the screen "Did you receive any lump-sum payments for 2024 or earlier?", select Yes.
Enter 2024 as the year the payment was for.
Enter the amount designated for 2024 from your form's description.
Follow the prompts to enter your 2024 return data.
Once finished, you can verify the result by viewing your 1040 (select Tax Tools > Tools > View Tax Summary > Preview my 1040). You will see a checkbox on Line 6c indicating the Lump-Sum Election was used.

CatinaT1Answer

Level 15

Yes, you should answer "Yes" to the question "Did you receive any lump-sum payments?" in TurboTax. Answering "Yes" does not double-count your income; instead, it triggers a special IRS calculation known as the Lump-Sum Election, which can actually reduce your tax bill.

When you receive a lump-sum payment for a prior year (like the 2024 windfall repayment received in 2025), the IRS requires the full amount to be reported in the year you received the check. However, they allow you to use the "lump-sum election" method to prevent that large payment from pushing you into a higher tax bracket.

TurboTax uses the total from Box 3 as your starting point. When you select "Yes," the software will ask you to break down how much of that Box 3 amount was for 2024. It then recalculates your 2025 tax as if that portion had been received back in 2024.

If your income was lower in 2024 than in 2025, or if the lump sum would make more of your Social Security taxable this year, this election ensures you only pay the amount of tax you would have owed if you had received the money on time.

TurboTax will run the numbers both ways—taxing it all in 2025 versus using the lump-sum election—and will automatically apply the method that results in the lowest tax for you.

To complete this section accurately, have your 2024 Tax Return handy. TurboTax will ask for:

The specific portion of the 2025 payment attributed to 2024 (found in the Description of Amount in Box 3 on your SSA-1099).
Your 2024 Filing Status.
Your 2024 Adjusted Gross Income (AGI).
Any Tax-Exempt Interest you reported in 2024.

Follow these steps to ensure the election is applied:

In the Social Security (SSA-1099) section, enter the full amounts exactly as they appear on your 2025 form.
On the screen "Did you receive any lump-sum payments for 2024 or earlier?", select Yes.
Enter 2024 as the year the payment was for.
Enter the amount designated for 2024 from your form's description.
Follow the prompts to enter your 2024 return data.
Once finished, you can verify the result by viewing your 1040 (select Tax Tools > Tools > View Tax Summary > Preview my 1040). You will see a checkbox on Line 6c indicating the Lump-Sum Election was used.

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M

mikez149

Level 2

After entering the windfall amount a screen comes up that says......

Now, let’s look at your 2024 form

If either you or Carolyn received benefits in 2024 that were already reported on your 2024 tax return, there will be an amount in box 5 of your Form SSA-1099.

Are they asking if we received windfall benefits in 2024 or just overall social security? If the latter, would I also enter my spouses's Social security for 2024 if she did not get a windfall amount on a prior screen?

Then the next screen says......

This info can be found on your 2024 tax return.

Adjusted gross income in 2024

Tax-exempt interest in 2024

Taxable Social Security benefits in 2024

Which forms/lines am I looking at to provide this information and will it be for both of us since it was a joint return?

Thanks, Mike

KrisD15

Level 15

Just the overall social security for 2024. Not any additional windfall.

TurboTax is asking if you received benefits in 2024 that were reported on your 2024 SSA-1099 Box 5 and which would then also have been reported on your 2024 Federal tax return (1040).

Yes, the 2024 social security you both earned and reported on your 2024 Federal return.

(If there was no Social Security Lump sum paid in TAX YEAR 2024 the amounts in your SSA-1099 Box 5 should add up to the same amount as listed on your 2024 Federal Return line 6a)

For the other amounts needed, please look at your tax year 2024 Federal return (Form 1040 or 1040-SR)

Adjusted Gross Income is on line 11
Tax Exempt Interest would be on line 2a but may be blank if none
Taxable Social Security would be listed on line 6b

You will report your 1099-R (including the lump-sum) on your 2025 return, but you do have two options regarding the tax treatment. .

You can be taxed on all the income on your 2025 tax return at your 2025 tax rate

OR

2.)You can opt to pay the tax on your 2025 return, BUT AT THE RATE YOU WOULD HAVE PAID ON IT HAD THE INCOME BEEN PROPERLY PAID IN THE PREVIOUS YEAR(S)..

If you have no tax on your Social Security Payments, it doesn't matter, but if the additional income puts you into a higher tax bracket, you might want to use that second option.

Basically you figure the tax you would have been charged on your 2024 return for that income and then pay that dollar amount on your 2025 return.

TurboTax can help you determine if this is advantageous for you.

Designate the 2024 amount as a lump-sum payment and proceed through the interview.

(NOTE- This is NOT the lump-sum Social Security death benefit.)

HERE is a link with more information.

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N

northidaho

Level 2

continuing in this thread about payment for 2024 SSA in 2025. during a final review the software is saying "Earlier Year Lump-Sum Social Security Ws(2024): Earlier year taxable social security benefits for taxpayer should not be more than $3954, 85% of the sum of Line B, earlier year total SSA and RRB benefits for the taxpayer and spouse." The number the program input into the field is $30,800 which is the correct number from the previous year for taxable ssa benefits. I can't determine where the $3954 number comes from and I can't seem to force finish my return to file it. Is this a program calculation error?

L

lgwalker59

Level 2

Make sure when you answer the lump sum interview questions, (Now let's look at your earlier return) make sure you enter the amount for both spouses on the earlier return (box 5 of SSA-1099M), even if only one has a lump sum payment. I ran into this exact same issue 🙂

N

northidaho

Level 2

yes, i used the interview but it still did not place the missing number from my social security into the correct box on the soc sec lump sum worksheet in order for it to calculate correctly.