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New Member
posted Feb 8, 2024 9:00:32 AM

Rcvd a lump sum payment from social security disability is this taxable ?

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2 Replies
Expert Alumni
Feb 8, 2024 9:24:45 AM

Possibly,  as with regular Social Security payments, they are taxable once you reach a certain income level.

 

Your benefits include monthly retirement, survivor and disability benefits. 

Your benefits may be taxable if the total of 

  • one-half of your benefits, plus 
  • all of your other income, including tax-exempt interest, is greater than the base amount for your filing status.

The base amount for your filing status is:

  • $25,000 if you're single, head of household, or qualifying surviving spouse,
  • $25,000 if you're married filing separately and lived apart from your spouse for the entire year,
  • $32,000 if you're married filing jointly,
  • If you're married and file a joint return, you and your spouse must combine your incomes and social security benefits when figuring the taxable portion of your benefits. Even if your spouse didn't receive any benefits.
  • $0 if you're married filing separately and lived with your spouse at any time during the tax year.

Please also see: Is Social Security Disability Income Taxable?

 

Level 15
Feb 8, 2024 9:34:10 AM

As JohnB5677 indicated, the lump-sum payment from Social Security may be partially taxable. It will be included in the total benefits on your Form SSA-1099 for the year that you received the payment. How much of it is taxable depends on your other income. If the lump sum is for a prior year, the SSA-1099 will show how much of the total is for the prior year or years.


If Social Security disability, including the lump sum, is your only income for the year, none of it is taxable and you do not have to file a tax return. If you have other income and file a tax return, there is an option called the lump-sum election that might reduce your tax, depending on your income in the year(s) that the lump sum is for. TurboTax will lead you through calculating the lump-sum election, and will use it if it saves you money.