Long Term Disability and SSA Tax Question

xadidasguyx · ‎February 4, 2021

My wife has been receiving Long Term Disability payments from Hartford for 2018-2020. Each year, we received a Hartford W2 which shows taxes being taken out (and not enough, now that we are married and in a higher tax bracket than what she was in while single). When I added her Long Term W2 into our taxes in 18 and 19, even more taxes would be deducted from my refund as not enough were being taken.

In 2020, they made us file for SSI. We received a lump sum and had to give it back to the Hartford.

I received a SSA-1099 which includes a total benefit paid of 24K including 6K of attorneys fees. When i enter this SSA-100 form into my taxes, it removes 4K from my refund.

I believe that i already paid taxes on the initial payments from the Hartford, so i do not understand why i would be taxed again on the money from SSA that went back to the Hartford. I am struggling to know how/where to enter this information so that i do not get double dinged for taxes.

Help, please.

MarilynG1 · ‎February 4, 2021

There should be an amount for each year on the SSA-1099 reporting your wife's Social Security Lump Sum Payments.

You should also be asked in the interview in this section if you repaid any of this amount, which you did when you repaid Hartford.

You will need Prior Year Returns as you will be asked how much of her Social Security was taxable in those years.

Click this link for more info on Reporting Lump Sum Social Security Benefits.

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xadidasguyx · ‎February 5, 2021

Thank you.

If I already paid taxes in 2018/2019/2020 on the direct payment from LTD with the W2, when you say"How much of her Social Security was taxable in that year", does that mean how much taxes I paid in regards to the LTD?

Cynthiad66 · ‎February 5, 2021

No. Only a portion, if any of your Social Security will be taxed. Refer to the Form 1040 2018, Line 5b. Some of that may be yours but that is the taxable amount of social security. You may have to figure out how much was hers. Then 2019 etc.

There is a worksheet that will show you exactly how that number was determined.

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Long Term Disability and SSA Tax Question

Deductions & credits

Deductions & credits

Deductions & credits