My wife received form SSA-1099 for 2021 that say it *Includes amounts paid in previous years.

[BigPoppy627]

My wife received form SSA-1099 for 2021 that say it *Includes amounts paid in previous years. However we did not receive SSA-1099 in the previous years. The 2021 form also shows most of the amount showing in the "Includes" as Benefits Repaid to SSA in 2021.

Are these amounts noted as "Includes:" on the bottom of the form to be reported as lump sum payments from previous years listed even though we don't have previous SSA-1099s and a substantial amount is shown as repaid In Box 4?

I tried entering the info that way as lump sums for previous years, but I get an error during the final check and I do not have forms from previous years to enter additional info from.

My wife had been fighting SSA for YEARS trying to get her benefits and the award had been revised several times, before finally receiving small payments.

[DianeW777]

You must enter the necessary information from each return year indicated on the Form SSA-1099 for TurboTax to be able to calculate the accurate taxable amount of social security.  You can request an IRS transcript for prior years.

• IRS Transcript and Return Copy Information

[BigPoppy627]

Would these transcripts show SSA-1099 info even though we didn't receive these documents in years 2018, 2019, or 2020? The 2021 SSA-1099 shows *INCLUDES: $$$ paid in 2021 for 2020, ...for 2019, ...for 2018, but we had neither received these payments or received 1099s for those years. It appears SSA simply kept changing their accounting and then made an offsetting adjustment in (box 4) to correct their errors. My wife didn't receive actual funds until 2021.

If I enter these amounts as lump sums in previous years, an error pops up as the lump sums are slightly greater than the Box 5 Net Benefits for 2021.

Sorry, I'm confused. 🙂

[BigPoppy627]

I have checked the transcripts for previous years and see no SSA payments listed however the online account is in my name, not my wife's. But we do file jointly.

Thank you!

[JamesG1]

The Social Security lump sum payment process requires you to enter information from your previous years tax returns.  Then the tax that would have been due from one or more prior year tax return is simply added to your 2021 tax return as an additional tax assessment.  

For instance, in 2021 you receive $20,000 in Social Security benefits, $5,000 for 2021 and $15,000 lump sum benefit for 2020.

You enter the information from your 2020 tax return (DianeW777 was suggesting using IRS transcript information).  The Social Security worksheets determine how much, if any, additional tax would have been owed.  This additional amount due is added to your 2021 tax return for payment.

If, in 2021, you had also received Social Security benefits for 2018 and 2019, those years are computed in the same way and the additional tax that would have been owed is added to your 2021 tax return.

To report Social Security lump sum payments, follow these steps:

• Go to Federal / Wages & Income / Your income / Retirement Plan and Social Security / Social Security.
• Click Start / Revisit to the right.
• At the screen Did you receive any lump-sum payments?, answer Yes.

See also this TurboTax Help.