The lump-sum payments sent under the Social Security Fairness Act are generally taxed as Social Security benefits received during the tax year, and are included in the SSA-1099 statement.
Follow these directions to report a Social Security lump payment:
- Down the left side of the screen, click on Federal.
- Down the left side of the screen, click on Wages & Income.
- Scroll down to Retirement plans and Social Security, click the down arrow to the right.
- Click on Start/Revisit to the right of Social Security (SSA-1099).
- At the screen Tell us about the benefits you received, enter the information as it is printed on the form.
- At the screen Did you receive any lump-sum payments?, click Yes.
- Enter the year and dollar amount from the SSA-1099.
- You will have to answer questions about that same year's tax return.
- Repeat for each year listed on the SSA-1099.
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