A lump-sum payment is a one-time Social Security payment that you received for prior-year benefits. For example, when someone is granted disability benefits they'll receive a lump sum to cover the entire time since they first applied for disability. This period could cover months or years.
The similar-sounding $255 lump-sum death benefit payment from Social Security is different. This is not a lump sum for tax purposes.
After you enter your SSA-1099 information, we'll ask if you received a lump-sum Social Security payment. If you didn't receive one, answer No and move on.
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.