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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2855
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I was just approved security disability. I got a back

Customer Question

I was just approved for social security disability. I got a back payment of 17000 dollars. Is this taxable?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Hello,

Social Security benefits include monthly retirement, survivor and disability benefits. They do not include supplemental security income (SSI) payments, which are not taxable.

The amount of Social Security benefits that must be included on your income tax return and used to calculate your income tax liability depends on the total amount of your income and benefits for the taxable year.

To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of:

If this was your only income for the year, none is taxable and you are not required to even file.

If you did have other income to add to half the SS benefit payment then some may be taxable based on your BASE amount below.

The base amount for your filing status is:

If you are married and file a joint return, you and your spouse must combine your incomes and Social Security benefits when figuring the taxable portion of your benefits. Even if your spouse did not receive any benefits, you must add your spouse's income to yours when figuring on a joint return if any of your benefits are taxable.

Please let me know if you need me to clarify.

Expert:  Barbara replied 1 year ago.

Different expert here – My name is ***** ***** please allow me to provide you with information regarding LUMP SUM PAYMENTS of social security disability which you may find helpful:

While you might have to pay taxes on a small portion of your lump sum payment from Social Security, the IRS does not penalize disability beneficiaries for receiving past-due benefits all in one year. Federal law provides that individuals can apportion past-due benefits to previous years, thus lowering or eliminating the taxable amount of their lump sum per year, without having to file amended tax returns.

Social Security sends beneficiaries a form called the SSA-1099 each year they receive benefits. If you're receiving this form for the first time, it should state in Box 3 the exact amount of your lump sum that was accrued during previous years. Each year will be listed separately alongside the total amount paid for that year. Rather than requiring you to file amended returns for those years, the IRS allows you to handle it all on your current tax return, using prior years' income amounts. This method is discussed in IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

The following links contain excellent detailed information.

http://www.irs.gov/publications/p915/ar02.html

http://www.disabilitysecrets.com/resources/disability/disability-and-social-security/how-is-social-s

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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