Retroactive federal government permanent disability payments

Forum|Forum|5 years ago
March 28, 2021
1 reply
5 views

How do retroactive federal government (FERS) retirement permanent disability payments get reported? Received official notice of permanent/final disability from OPM along with my new regular monthly payment amount in November 2020. Prior to this, in October 2020 received retroactive lump sum going back to 2017 first year of disability. My CSA 1099R reports as a gross amount the total payments received - retroactive lump sum, plus total of monthly payments received in 2020. Part of issue maybe my CSA 1099R should have lump sum payment and regular annuity payments reported separately (based on information from back of the CSA 1099).

zzAmyB

Level 2

I have this exact same problem. I received 3 years of OPM Disability Retirement back pay in 2020. This should be pretty common, as OPM takes a long time to go through the approval process. If I could allocate this income to the years in which it should have been paid to me, I probably wouldn't owe any extra taxes this year. But if I claim it all in 2020, it bumps me up like 3 tax brackets and says I owe a lot. This is effectively penalizing the disabled for having to wait 3 years to receive the money owed to them.

AmyC

Level 15

Unfortunately, the pay for OPM is one lump sum and goes on your tax return as such.

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kk769330

Level 2

I'm trying to figure out why I can only enter a combine total in box 63 for the Iowa income tax withheld vs the individual Iowa income tax withheld for me and my spouse. is the combine amount correct for this box 63?