SS Tax Computation Error

[FlyFisher99]

My 2020 Federal refund was changed with this explanation: “We changed the amount of taxable Social Security benefits on your tax return because there was an error in the computation of the taxable amount”.  I've reviewed the SS 1099R and the TurboTax “Social Security Benefits Worksheet”; the numbers match (don’t see any input errors).  The “Earlier Year Lump-Sum Social Security Worksheet” also looks good.  Any suggestions? Last resort will be to call the number on the “Adjusted refund…” letter and ask what was in error.

[SweetieJean]

You do not get a 1099-R for Social Security.  You get an SSA-1099.

But the IRS might have changed something else on your return, which in turn changed the taxable percent of Social Security.  Wait for a detailed letter from the IRS.

[FlyFisher99]

The sentence I quoted was the "detailed" letter from IRS (titled "Changes to your 2020 Form 1040SR).  Nothing telling me the nature of the "error in the computation of the taxable amount" .

Correct - it was the SSA-1099, where I verified the numbers matched the worksheet.

[FlyFisher99]

Tried calling IRS number from the letter, can’t get through. In mean time, I’ve sort of backed into root of problem.  I had a SS lump sum distribution paid and taxed in 2019 (taxable SS on 2019 1040/5B was 85% of lump sum plus regular SS – all calculated on SS Benefits Worksheet). 

For 2020 TT completed not only the SS Benefits Worksheet, but also “Earlier Year Lump-Sum SS Worksheet” and “Lump-Sum SS Worksheet”.  The amount entered to 1040/5B  (from SS Benefits worksheet/20) was the lessor of the Lump Sum worksheet/20 or the SS Worksheet/18.

It looks like the IRS didn’t accept the lump sum worksheet figure and recalculated my taxes solely on 2020 SS distribution (ignoring the prior year lump sum).  Which, actually makes sense to me; 2019 regular SS plus lump sum were taxed in 2019.  Nothing to carry forward to 2020. Real question is why TT “automatically” carried the 2019 lump sum forward to 2020 and calculated the lower taxable SS amount (I liked the lower figure, IRS didn’t).

If anyone has additions or corrections to this topic, please respond.  Otherwise, this is an FYI.