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Returning Member

Social Security benefits for prior years

I received social security benefits in 2017 that included a lump-sum benefit for 2014-2016. Are these benefits taxable this year, or can I spread them out somehow?

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Level 7

Social Security benefits for prior years

It depends. You might need to pay taxes on a small portion of your lump-sum payment. However, you might be able to avoid these taxes by apportioning prior year benefits to those previous years’ income (without filing any amended returns). TurboTax will ask you about this during the entry interview for Form SSA-1099.

 

See this post for more information: What is a lump-sum Social Security payment?

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New Member

Social Security benefits for prior years

I'm sorry Im finding this whole thing pretty confusing. I received a lump sum payment in 2018 which included back payments for 2014 - 2017. It also shows a higher amount than the other years saying: $20,124.00 paid in 2018 for other tax years. I was told that my benefits would be tax free since its a disability that the government is already paying. If that's not the case, why in the world did they not withhold taxes they wanted to repay themselves?? However, I still would like to know how to proceed. Is it generally more beneficial to enter the prior years separately or just do the lump sum. With my lump sum I would have to pay $11,000.00 which I literally can not pay. I am at poverty level already...please advise. Thank you so much