It is income reported to you from Social Security. This is simply a one-time Social Security payment that you received for prior-year benefits. This is called a lump-sum payment. When someone is granted disability benefits, for example, they will receive a lump sum to cover the entire time since they first applied for disability; this period could cover months or years. If this is your only income, you are not required to file.
You have a choice when you get a lump sum payment from Social Security. You can be taxed on all of it this year or you can have it taxed as if it were on your 2010 tax return.
The second option is to treat the payment as received in the earlier year or years. This is done by figuring whether any part of these benefits is taxable, based on the earlier year's income. Any part that is taxable is then added to any taxable benefits for the current year and included on Form 1040, line 20b. The taxpayer can elect this method if it lowers the taxable benefits.
For option two, you will need access to your 2010 return for information.
- After you enter your 2018 SSA-1099 information, we'll ask if you received a lump-sum Social Security payment. Answer Yes and follow the onscreen 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. Start with 201x. (earliest year)
- On the next screen, Enter your 201x lump-sum payments received in 2018 and Continue
See the screen shot below.
