Lump Sum Social Secutiy Payment

[kidellenville]

I received a WEP elimination lump sum payment in 2024 which is included in my 2025 Social Security Benefits Statement.  My wife also receives social security but did not receive a lump sum payment.

When completing the section in TT for social security information I answered yes to the question about a lump sum payment and indicated it was for 2024.

I was then prompted to another screen which asked about specific information related to my 2024 tax return, including adjusted gross income, tax exempt interest (line2a) and social security benefits and taxable amount (lines 6a and 6b)

Since we file a joint tax return I filled in the blanks on the screen as they appeared on the 2024 joint tax return.  I believe I did that correctly but just want to double check.  We are filing a joint return in 2025.

Please advise if this was done correctly or am I missing anything.

Thank you.

[JamesG1]

What you describe sounds like you reported the income correctly.

The Social Security lump sum payment process requires you to enter information from your previous years tax returns.  Then the tax that would have been due from one or more prior year tax returns is simply added to your current year tax return as an additional tax assessment.  

For instance, in 2025 you receive $20,000 in Social Security benefits, $5,000 for 2025 and $15,000 lump sum benefit for 2024.

You enter the information from your current year’s income tax return.  The Social Security worksheets determine how much, if any, additional tax would have been owed.  This additional amount due is added to your current year’s income tax return for payment.

To report Social Security lump sum payments, follow these steps:

• Go to Federal / Wages & Income / Your income / Retirement Plan and Social Security / Social Security.
• Click Start / Revisit to the right.
• At the screen Did you receive any lump-sum payments?, answer Yes.

See also this TurboTax Help.

[fanfare]

You have the option to go back to your records, as described,

or put the entire amount on your current tax return.

You should do it both ways and file the more favorable method.

to take the second option, tell TurboTax you did not get a Lump Sum.

@kidellenville