Ssa windfall ssa benefit answer

[Rosemaryjean1]

If We fild jointly and I was the one with the Ssa windfall, do I add only my benifit or onclude my husbands?

[xmasbaby0]

ALL of your combined income must be entered on your joint tax return.   If you both have a SSA1099, then you enter both of them.   The income entry screen will ask which one of you the SSA1099 is for and give you a spot with your name on it.

 Go to Federal> Wages & Income>>Retirement Plans and Social Security  (SSA1099 and 1099RRB) to enter your SSA1099.

LUMP SUM PAYMENT FOR FAIRNESS ACT

Your 2025 SSA1099 will show the extra payment you received in 2025 as a result of the Fairness Act.  Look in the bottom left corner.   It will say something like “Includes $XXXX  Paid in 2025 for 2024.

When the software asks if you have a lump sum payment say yes.  The program will help to determine if is better for you to attribute the sum to 2024 or to 2025, based on your AGI for each of those years.   This will all be done within the 2025 program; you do not amend 2024.

https://www.irs.gov/faqs/social-security-income/back-payments/back-payments

[Rosemaryjean1]

Turbotax is telling me that the amount I entered from my 2024 tax filing is too high. I am getting the figure directly from line 6a on my return.

[xmasbaby0]

@Rosemaryjean1 Are you using the 2024 amount on line 6a of your 2024 return that includes both SSA1099's?  Did you look at your own 2024 SSA1099?

[Rosemaryjean1]

Yes as we filed jointly. This was what I was told previously. 

[Rosemaryjean1]

Should I back out my husband’s SSA?

[DaveF1006]

No, do not omit any amount reported in the 1099 SSA.  WEP payments are taxable Social Security payments. If your husband’s Social Security was reduced in the past because he had a “non-covered” government pension, like a teacher or police pension, those reductions ended in January 2024.

Since the law applied retroactively to January 1, 2024, many people received a large lump-sum payment in 2025 or 2026 to pay back the amount that was previously withheld.

[Rosemaryjean1]

So this is why I am confused….I had the windfall lump sum payment. When I transfer line 6a from last year’s taxes to this year’s spreadsheet, Turbotax tells me that it is too much $$$s and brings it up as an error. The amount in the 2024 line 6a is a total of my and my husband’s SSA plus CPP and OAS from Canada. 

[DaveF1006]

Entering a large "Windfall" amount in the SSA-1099 box can cause a "limit error" in TurboTax. To avoid this and stay treaty-compliant:

1. Don't combine them into one entry: Enter your U.S. SSA-1099 as its own item, which includes the lump-sum payment from the WEP. 
2. Add a second "Social Security" entry: In the Social Security section, click "Add another SSA-1099."
3. For the Payer Name, enter "Service Canada - CPP/OAS."
4.  Put the total amounts from the CPP/OAS in Box 5 of this form.

If you still encounter the error, you may wish to enter the WEP lump-sum into the second SSA-1099 to see if this works. In fact, let us know if this is successful.

[Rosemaryjean1]

I believe my error was adding our TOTAL SSA benefits for 2024 instead of adding the TAXABLE amount of SSA. A big difference. Am I correct??

[CatinaT1]

You shouldn't be asked for the total or taxable  social security benefits for 2024. When you are entering your 1099-SSA, you will be asked how much of that Box 3 amount was for 2024. You will also be asked for your 2024 filing status, adjusted Gross Income, and any tax-exempt interest. 

Answer "Yes" to the question "Did you receive any lump-sum payments?" in TurboTax. Answering "Yes" does not double-count your income; instead, it triggers a special IRS calculation known as the Lump-Sum Election, which can actually reduce your tax bill.

When you receive a lump-sum payment for a prior year (like the 2024 windfall repayment received in 2025), the IRS requires the full amount to be reported in the year you received the check. However, they allow you to use the "lump-sum election" method to prevent that large payment from pushing you into a higher tax bracket.

TurboTax uses the total from Box 3 as your starting point. When you select "Yes," the software will ask you to break down how much of that Box 3 amount was for 2024. It then recalculates your 2025 tax as if that portion had been received back in 2024.

If your income was lower in 2024 than in 2025, or if the lump sum would make more of your Social Security taxable this year, this election ensures you only pay the amount of tax you would have owed if you had received the money on time.

TurboTax will run the numbers both ways—taxing it all in 2025 versus using the lump-sum election—and will automatically apply the method that results in the lowest tax for you.

To complete this section accurately, have your 2024 Tax Return handy. TurboTax will ask for:

• The specific portion of the 2025 payment attributed to 2024 (found in the Description of Amount in Box 3 on your SSA-1099).
• Your 2024 Filing Status.
• Your 2024 Adjusted Gross Income (AGI).
• Any Tax-Exempt Interest you reported in 2024.

Follow these steps to ensure the election is applied:

1. In the Social Security (SSA-1099) section, enter the full amounts exactly as they appear on your 2025 form.
2. On the screen "Did you receive any lump-sum payments for 2024 or earlier?", select Yes.
3. Enter 2024 as the year the payment was for.
4. Enter the amount designated for 2024 from your form's description.
5. Follow the prompts to enter your 2024 return data.
6. Once finished, you can verify the result by viewing your 1040 (select Tax Tools > Tools > View Tax Summary > Preview my 1040). You will see a checkbox on Line 6c indicating the Lump-Sum Election was used.