How do I use publication 915 to report SSDI lump sum payments?

[JulieH1 · Accepted solution]

While you might have to pay taxes on a small portion of your lump sum payment from Social Security, the IRS does not penalize disability beneficiaries for receiving past-due benefits all in one year. Federal law provides that individuals can apportion past-due benefits to previous years, thus lowering or eliminating the taxable amount of their lump sum per year, without having to file amended tax returns.

Social Security sends beneficiaries a form called the SSA-1099 each year they receive benefits. If you're receiving this form for the first time, it should state in Box 3 the exact amount of your lump sum that was accrued during previous years.

 Each year will be listed separately alongside the total amount paid for that year. Rather than requiring you to file amended returns for those years, the IRS allows you to handle it all on your current tax return, using prior years' income amounts. This method is discussed in IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. (This often isn't an issue for SSI backpay, because large amounts are paid in three small installments six months apart.)

Social Security benefits are taxed in the same way. This is true whether they’re retirement, survivors, or disability benefits.

Regarding SSDI taxable income concerns, none of your Social Security disability income (SSDI) is taxable if half of your SSDI plus all your other income is less than:

• $25,000 if you filed as single, head of household, or married filing separately, and you and your spouse lived apart all year
• $32,000 if you’re married filing jointly
• **fdSocSecTaxableInc3** if you’re married filing separately, and you and your spouse lived together at all during the year

Up to 50% of your SSDI is taxable if your income is more than those amounts. Also, up to 85% of your SSDI is taxable if half of your SSDI plus all your other income is more than:

• $34,000 if you filed as single, head of household, or married filing separately, and you and your spouse lived apart all year
• $44,000 if you’re married filing jointly
• $0 if you’re married filing separately, and you and your spouse lived together at all during the yea

[cbigfeet]

I don't see how or where to put in the worksheets into Turbo Tax Deluxe.  My wife got lump sum for last 5 years.  I don't see that there's an SSA-1099 form. What form to use?  Where to put what from worksheets?