how do i report a lump sum payment

Forum|Forum|3 months ago
April 13, 2026
1 reply
23 views

lump sum payment for disability including previous years

TurboTax Online

SharonD007

Level 14

Please clarify if your lump sum payment is for Social Security. What type of form did you receive?

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

kstern12Author

Level 2

To clarify, the lump sum payment is repayment for disability benefits for 2021, 2022 and 2023. I am not sure how and where to put those values. Also, the repayments had to be turned over to the disability insurance company. So I also wonder if I should be getting a refund for those years of the tax paid. (The disability insurance company covers 2/3 of my previous salary. If SSA kicks in, then they cover the balance of the amount. In 2024 I filed with the SSA benefits and paid substantially less in taxes than when the insurance company covered all of the disability amount.

JamesG1

Level 15

In TurboTax Online, 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.

A Claim of Right Repayment is a deduction you can take in the current tax year if you are required to pay back income in excess of $3,000 from a previous tax year that you thought you could keep. You reported and paid taxes on the money, not knowing you would have to pay it back.

Examples of this type of income include: the repayment of signing bonuses, moving expenses, unemployment compensation, and other funds.

In Turbotax Online, the claim of right repayment over $3,000 may be reported as a deduction by following these steps.

Down the left side of the screen, click on Federal.
Down the left side of the screen, click on Deductions & Credits.
Click the down arrow to the right of Other Deductions and Credits.
Click to the right of Other Deductible Expenses.
At the screen Did you have any of these other expenses?, click Yes.

The deduction is reported on line 16 of Schedule A Itemized Deductions.

IRS Publication 525 Taxable and Nontaxable Income, page 36, states:

Repayment over $3,000

If the amount you repaid was more than $3,000, you can deduct the repayment as an other itemized deduction on Schedule A (Form 1040), line 16, if you included the income under a claim of right. This means that at the time you included the income, it appeared that you had an unrestricted right to it. However, you can choose to take a credit for the year of repayment. Figure your tax under both methods and compare the results. Use the method (deduction or credit) that results in less tax.

See this TurboTax Help. Taking the credit option involves using TurboTax Desktop.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"