Retroactive federal government permanent disability payments

[bsmw4]

How do retroactive federal government (FERS) retirement permanent disability payments get reported? Received official notice of permanent/final disability from OPM along with my new regular monthly payment amount in November 2020. Prior to this, in October 2020 received retroactive lump sum going back to 2017 first year of disability. My CSA 1099R reports as a gross amount the total payments received - retroactive lump sum, plus total of monthly payments received in 2020. Part of issue maybe my CSA 1099R should have lump sum payment and regular annuity payments reported separately (based on information from back of the CSA 1099).

[zzAmyB]

I have this exact same problem.  I received 3 years of OPM Disability Retirement back pay in 2020.  This should be pretty common, as OPM takes a long time to go through the approval process.  If I could allocate this income to the years in which it should have been paid to me, I probably wouldn't owe any extra taxes this year.  But if I claim it all in 2020, it bumps me up like 3 tax brackets and says I owe a lot.  This is effectively penalizing the disabled for having to wait 3 years to receive the money owed to them. 

[AmyC]

Unfortunately, the pay for OPM is one lump sum and goes on your tax return as such.

[kk769330]

I'm trying to figure out why I can only enter a combine total in box 63 for the Iowa income tax withheld vs the individual Iowa income tax withheld for me and my spouse. is the combine amount correct for this box 63?

[BillM223]

@kk769330

Box 63 on what form? Remember that we in the Community cannot see your private tax data, so help us help you.

Also, in the future, please create a new post when changing the subject. That way, more people will see your question and be able to help.

[kk769330]

This is Form IA 1040. Still new to this process. 

[AmyC]

Box 63 is calculated from all of the forms you entered in the federal section. The w2s, 1099s, etc. You should not have to enter anything in Iowa.

I am guessing you are in the desktop and entering information directly. Right click and data source. You come to a tax payments worksheet that  shows every form and a column for you and spouse.

Please click on step by step and enter things in the federal section. Your return will be more accurate and less stressful for you.

@kk769330