Form SSA-1099SM for SSDI benefits incorrectly being taxed.

[cbsprings]

I was approved for SSDI in early 2024, which included all of 2023 and some of 2022 as lump sum payments in 2024.  

When I enter the info from form SSA-1099SM into appropriate "lump-sum payment 2022 (and 2023)" fields within Turbo Tax, it is reporting my SSDI income from previous years (lump sum) as taxable.

I was informed that SSDI is not taxable income.  So, how do enter lump sum amount for previous years (2022, 2023) into Turbo Tax to avoid being taxed? 

Thanks in advance!

[rjs]

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@cbsprings wrote:

I was informed that SSDI is not taxable income.

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You were misinformed, or you misunderstood what someone told you. Up to 85% of your SSDI is taxable, depending on the amount of your other income.

If SSDI is your only income of any kind for the year, none of it is taxable and you do not have to file a tax return.

[ThomasM125]

Social Security Disability Income (SSDI) can be taxable, depending on your income from other sources. TurboTax will determine it's taxability based on the answers to the questions you will see when you indicate that you had a lump sum payment in the current year. You need to enter the correct amount of lump sum payments by year as requested in the program. If the lump sum amounts were not taxable in the years to which they apply and your current year payments are not taxable based on your other income, then your benefits will not be show as taxable on your tax return. You may need to go back to your social security form SSA-1099 entry to insure that you answered the questions properly.