SSDI received in 2023 covering multiple years

[72JLtax]

Taxpayer received SSDI award letter in spring 2023 with $ amount of lump sum covering most of 2022 and $ amount of ongoing payments in 2023. No 1099 has been received. Expect this in 2024.  Extension was filed for 2022 but this wasn't included.  How to handle this in Turbo Tax.  Are the LSE worksheets in Turbo Tax? Thanks

[xmasbaby0]

If the payments were received in 2023, then the SSA1099 that is sent out in January of 2024 will show those payments.  The SSA1099 will be entered on the 2023 return.  You do not put it on a 2022 return.   When you complete the 2023 return there will be a way to enter the lump sum payment that is shown on the SSA1099.

[Mike9241]

the benefits if taxable are taxable in 2023. there is no effect on your 2022 return.

since you are receiving a lump sum benefit for 2022, in 2023 you can use the Earlier Year Lump Sum Social Security Worksheet to compute the taxes on the 2022 benefits received.

[rjs]

After you enter your SSA-1099 in your 2023 tax return, TurboTax will ask whether you received a lump-sum payment. Select Yes and continue through the questions. After you enter the information that it asks for from your 2022 tax return, it will complete the LSE worksheet and calculate whether the lump sum election saves you money. (It doesn't always save money.) TurboTax will use the lump sum election on your 2023 tax return if it saves you money.

[72JLtax]

There is no SSA-1099.  Won't have one until 2024.  Since 2022 has not been filed (extension filed) and there is an award letter that shows amount allocated to 2022, can that amount be put on 2022 return instead of the 2023 return? 

[xmasbaby0]

NO.   If you received the money in 2023, you enter it when you prepare your 2023 tax return in 2024.  You do not use an award letter to prepare a tax return.  You wait until you have the SSA1099 that will be sent to you in January.  Then you use it on your 2023 tax return.

Understand that when the Social Security Administration issues that SSA1099 it is sending a copy to the IRS.   It will show that the money was paid to you in 2023.   You prepare your tax return so that your information matches the information on the SSA1099.   As explained to you already, you will be able to indicate on your 2023 return that part of the amount paid to you in 2023 was for tax year 2022.

[sea tax]

I received a lump sum payment from SSA in 2023 for 2022.  Turbo tax is asking for my Taxable Social Security benefits in 2022.  I did not have any social security benefits in 2022.  It does not like my answer.  It keep saying needs review.  What do I do?

[rjs]

@sea tax 

What was your answer that TurboTax "does not like"? Did you enter zero? The "Needs Review" is not necessarily because of the "Taxable Social Security benefits in 2022." On the same screen where you enter Taxable Social Security benefits in 2022, did you enter your Adjusted gross income in 2022? Leaving that blank will cause the "Needs Review" message. If you did not file a tax return for 2022, enter zero.

If you enter zero for both Adjusted gross income in 2022 and Taxable Social Security benefits in 2022, and you still get "Needs Review," go to Smart Check and let it check your return for errors. That will give you a more detailed message about what the problem is.

[sea tax]

Thank you for your response.  The zero was missing!