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SSI DISABILITY LUMP SUM

I FILED FOR DISABILITY IN  2018 BUT BECAUSE OF COVID IT HAD A DELAY AND WAS APPROVED IN DECEMBER.  I RECIEVED MY PAYMENT FOR DEC 2018- JAN 2023 SO I DON 'T GET MY 1099 YET.  I DON'T WANT TO WAIT UNTIL NEXT YEAR TO FIGURE OUT HOW MUCH WILL BE TAXED BUT NEITHER SOCIAL SECURITY NOT IRS WILL HELP. DOES ANYONE HERE KNOW?

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1 Reply
AnnetteB6
Employee Tax Expert

SSI DISABILITY LUMP SUM

The amount that will be taxed will depend on a lot of factors that are not known at this point in time, such as the amounts of other income that you will be reporting on your 2023 tax return.  Your other income and filing status will affect whether the portion of your 2023 Social Security benefits will be taxable or not.

 

As for the portions for prior years that were paid to you in a lump sum, there is a series of lump sum Social Security worksheets that TurboTax will use to determine the taxable amount of those payment and whether they are taxable at all.  There is one worksheet for each year of benefit that you received.  After all of the worksheets are completed, you will be able to include any income tax due for those payments as part of your 2023 tax return instead of amending those prior year return.  

 

The worksheets can be filled in by hand, but they can be tricky and confusing.  They can be found in IRS Publication 915 in the Lump Sum Election section.  You would fill in one worksheet for each year of benefits received, and then complete the summary worksheet to tally all the results.  There is an example in the IRS publication you can use as a guide.

 

Also, to learn more, see the following TurboTax help article:

 

What is a lump-sum Social Security payment?

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