A portion of the benefits will be taxable because when the sum of the benefits received plus all other taxable income exceeds the base amount of $32,000 (for married filing jointly) then some of the benefits become taxable. The portion that becomes taxable depends on the total amount of income. The most that can be taxable is 85% of the benefits.
If the lump sum was received for benefits attributed to an earlier year, then the taxes on that amount can be calculated separately based on the earlier year's income if it would lower the total taxes due on the 2008 return. These rules are explained in Publication 915.
See pages 2 - 4 and pages 11 - 14 - http://www.irs.gov/pub/irs-pdf/p915.pdf