Social security disability back pay

Forum|Forum|3 years ago
November 16, 2022
2 replies
2 views

I received a lump sum payment when I was awarded social security disability. Do I have to claim it all on thus year's taxes even though about half of it was for payments that were awarded for the previous year? Also, if so how can I reduce my tax on it?

R-SchuleCPA

Level 5

If you have provisional income over $34,000, 85% of your benefits are taxable. If you're married filing jointly and have a combined income over $32,000, up to 50% of your disability benefits are taxable. Combined income over $44,000 will cause up to 85% of your disability benefits to be taxable.

The IRS does not penalize disability beneficiaries for receiving past-due benefits all in one year. Federal law provides that individuals can apportion past-due benefits to previous years, thus lowering or eliminating the taxable amount of their lump sum per year, without having to file amended tax returns.

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JandKit

Level 6

Hi Greg102300

Thank you for your question concerning social security disability. It sounds like you have a lump sum distribution from social security. You should receive form SSA-1099 for 2022. This form will show you if the income is to be spread over more than one year. Turbotax can assist you with the entry:

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/lump-sum-social-security-payment/L1koaEht4_US_en_US?uid=lak0c498

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