A lump-sum payment is a one-time Social Security payment that you received for prior-year benefits. For example, when someone is granted disability benefits they'll receive a lump sum to cover the entire time since they first applied for disability. This period could cover months or years.
TurboTax will prompt you for the information needed in order to calculate any taxable amount.
After you enter your SSA-1099 information, TurboTax will ask if you received a lump-sum Social Security payment.
If you did, answer Yes and follow the instructions. Your SSA-1099 lump-sum section breaks down the payments into what amount was received for each preceding year. You can only enter one year at a time. If you need to enter benefits received for a different tax year, select Add another lump-sum payment.
You should enter amounts for all of the years covered by the lump-sum payment received in 2022. You can continue entering lump-sum payments in TurboTax Online for amounts received in 2022 for years prior to 2018. The instructions for this section indicate that it can go back to 1984.
Please see this help article and IRS Publication 915 for more information and instructions regarding reporting lump-sum Social Security payments.
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