Rev. date: 08/18/2012
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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