I received a lump sum payment for social security for prior years.. Where do I enter my taxes withheld for my lump sum payment.

[DianeW777]

The lump-sum election has always worked correctly in TurboTax. Have all tax returns available for each year included in the lump sum payment.

This can be handled on your tax return for 2021. The Form SSA-1099 should show a total amount in box 5, and then the amount that is designated for each year in box 3. Worksheet 4 is included after Worksheet 2 is completed for each year.

Be sure to select "lump-sum" method of reporting in this situation which is all done on the tax return for the year of receipt of the benefits.  Enter the appropriate amounts for each year when you start that section of your return.   Continue to add each year for all years listed in box 3. There is no amendment required.

Also enter a zero if your Social Security benefits weren't taxable or there were none in the earlier year (such as for a spouse). If you are using the TurboTax CD/Download version review the Lump-Sum Social Security Worksheet in Forms.  You can also review 'Earlier Year Lump-Sum Worksheet' for each year. 

For TurboTax Online review this link: How to Preview My Online Return Before Filing

Please update if you have more questions.  @Pawoodhouse

[dmm55423]

I understand entering the lump sums for each year separately.  I don't understand "Enter a zero if your Social Security benefits weren't taxable".  Is this where I need to enter the result from the Publication 915 worksheet 4 for each year I received SSA backpay?  

[DianeW777]

Yes.  combine the total of all years on Worksheet 4 for 'line 20. Enter the total of the amounts from Worksheet 2, line 21'. 

That statement means that if you did NOT have any social security benefits in an earlier year, then the amount would be zero when asked for the taxable benefits in an earlier year..  In other words, if you had no social security benefits in an earlier year, there would be no amount of taxable benefits for the earlier year.

@dmm55423

[Janetm1964]

I received a SS lump sum payment in 2021 that included money I should have received in 2020. Does that amount go in the slot for taxable SS income from 2020, even though I didn't actually receive money that year?

[MayaD]

Generally, you use your 2021 income to figure the taxable part of the total benefits received in 2021. However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year.

You can elect this method if it lowers your taxable benefits. Under the lump-sum election method, you refigure the taxable part of all your benefits for the earlier year (including the lump-sum payment) using that year's income. Then, you subtract any taxable benefits for that year that you previously reported. The remainder is the taxable part of the lump-sum payment. Add it to the taxable part of your benefits for 2021. 2021 Publication 915. 

In TurboTax:

• Login to your account.
• Select Federal from the left menu
• Go to Wages and Income 
• Scroll down to Retirement Plans and Social Security.
• Select Update/ Revisit next to Social Security (SSA-1099, RRb-1099). 

we will ask you to enter:

What year was the lump-sum payment for?

What year was the lump-sum payment for? 

How much was your lump-sum payment for 2020?

[gg89]

I reported my 2019 SSDI lump sum with my 2020 taxes. Turbotax is asking me to enter that amount again? So my question is am I being taxed on the lump sum amount twice?

Thank you 

[MarilynG]

If you did not receive a lump-sum SSDI payment in 2021, say NO to that question.

In a lump-sum distribution, you are only taxed on the amount for that year; you're just reporting for the other years essentially.

Here's more info on Lump Sum Social Security Payments. 

@gg89

[sara-ricci]

So, if I received lump sum benefits for years: 2021, 2020, 2019, 2018 and there is still a large amount in the remaining 'years prior', I do not need to state that on the tax form?  Also, There is no more space provided in that section.

[MonikaK1]

After you enter your SSA-1099 information, TurboTax will ask if you received a lump-sum Social Security payment. 

If you did, answer Yes and follow the instructions. Your SSA-1099 lump-sum section breaks down the payments into what amount was received for each preceding year. You can only enter one year at a time. If you need to enter benefits received for a different tax year, select Add another lump-sum payment.

You should enter amounts for all of the years covered by the lump-sum payment received in 2022. You can continue entering lump-sum payments in TurboTax Online for amounts received in 2022 for years prior to 2018. The instructions for this section indicate that it can go back to 1984.

Please see this help article and IRS Publication 915 for more information and instructions regarding reporting lump-sum Social Security payments. 

[hmtof873]

TurboTax completely failed me regarding my SS lump sum payment. I went ahead and submitted my taxes believing that TurboTax would do it right, however when looking at Notice 703 and then doing the math on Worksheets 1, 2 and 4 in Publication 915 (3x by the way, to make sure I was right) TurboTax completely disregarded the math. I now have to file an amended return and can't until 2/15/25. This is exactly why I always double or triple check everything. My return would have been MUCH HIGHER if TurboTax would have done the math correctly. I am very disappointed! 

[juliomora]

Will that affect my 2024 taxes and do I have to include that? I only reported it on my 2020 taxes and never reported it after that. Please let me know. Thank you.

[KrisD15]

This is a very old thread with several people contributing.

If you received a lump sum payment from social security, you only need to report it once, on the tax return for the year you received the payment. 

(you do get an option on which year income to base the tax on, but that might be a different question)