Social Security Income > Back Payments

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Frequently Asked Tax Questions

Social Security Income - Back Payments

Rev. date: 1/2010

I received social security benefits this year that were back benefits for prior years. Do I amend my returns for prior years? Are the back benefits paid in this year for past years taxable for this year?

Social Security and Railroad Retirement Benefits

You cannot amend returns for prior years to reflect social security benefits received this year. You must include the taxable part of a lump-sum payment of benefits received in the current year (reported to you on Form SSA-1099) in your current year's income, even if the payment includes benefits for an earlier year.

However, there are two ways to determine the amount of income to include:

You can use your current year's income to figure the taxable part of the total benefits received in the current year. OR
You may make an election to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year.
- You can select the lump-sum election method if it lowers the taxable portion of your benefits.
- Under this method you refigure the taxable part of all your benefits for the earlier year using that year’s income.
- Then you subtract any taxable benefits for that year that you previously reported.
- The remainder is the taxable part of the lump sum payment.
- There are worksheets in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to help you calculate the taxable portion using this method.

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