Previous Page  Table of Contents  Index  Next Page 
LumpSum Election(p11)For Use in Tax Year 2014 
This type of lumpsum benefit payment should not be confused with the lumpsum death benefit that both the SSA and RRB pay to many of their beneficiaries. No part of the lumpsum death benefit is subject to
tax. 
Because the earlier year's taxable benefits are included in your 2014 income, no adjustment is made to the earlier year's return. Do not file an amended return for the earlier year.

Will the lumpsum election method lower your taxable benefits?(p11)For Use in Tax Year 2014 
Making the election.(p11)For Use in Tax Year 2014 
Once you elect this method of figuring the taxable part of a lumpsum payment, you can revoke your election only with the consent of the IRS.

Lumpsum payment reported on Form SSA1099 or RRB1099.(p11)For Use in Tax Year 2014 
Example(p11)For Use in Tax Year 2014 
Income  2013  2014  
Wages  $20,000  $ 3,500  
Interest income  2,000  2,500  
Dividend income  1,000  1,500  
Fully taxable pension  18,000  
Total  $23,000  $25,500 
Before you begin:
 
1.  Enter the total amount from box 5 of ALL your Forms SSA1099 and RRB1099. Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a  1.  $11,000  
2.  Enter onehalf of line 1  2.  5,500  
3.  Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13  3.  25,500  
4.  Enter the amount, if any, from Form 1040 or 1040A, line 8b  4.  0  
5.  Enter the total of any exclusions/adjustments for:
 5.  0  
6.  Combine lines 2, 3, 4, and 5  6.  31,000  
7.  Form 1040 filers:
Enter the amounts from Form 1040, lines 23 through 32, and any writein
adjustments you entered on the dotted line next to line 36.
Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17  7.  0  
8.  Is the amount on line 7 less than the amount on line 6?  
No.  None of your social security benefits are taxable. Enter 0 on Form 1040, line 20b, or Form 1040A, line 14b.  
Yes.  Subtract line 7 from line 6  8.  31,000  
9.  If you are:
 9.  25,000  
Note. If you are married filing separately and you lived with your spouse at any time in 2014, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.  
10.  Is the amount on line 9 less than the amount on line 8?  
No.  None of your benefits are taxable. Enter 0 on Form 1040, line 20b, or on Form 1040A, line 14b. If you are married filing separately and you lived apart from your spouse for all of 2014, be sure you entered "D" to the right of the word "benefits" on Form 1040, line 20a, or on Form 1040A, line 14a.  
Yes.  Subtract line 9 from line 8  10.  6,000  
11.  Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2014  11.  9,000  
12.  Subtract line 11 from line 10. If zero or less, enter 0  12.  0  
13.  Enter the smaller of line 10 or line 11  13.  6,000  
14.  Enter onehalf of line 13  14.  3,000  
15.  Enter the smaller of line 2 or line 14  15.  3,000  
16.  Multiply line 12 by 85% (.85). If line 12 is zero, enter 0  16.  0  
17.  Add lines 15 and 16  17.  3,000  
18.  Multiply line 1 by 85% (.85)  18.  9,350  
19.  Taxable benefits. Enter the smaller of line 17 or line 18. Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b  19.  $3,000  
If you received a lumpsum payment in 2014 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. 
Enter earlier year 2013 
1.  Enter the total amount from box 5 of ALL your Forms SSA1099 and RRB1099 for the earlier year, plus the lumpsum payment for the earlier year received after that year  1.  $2,000  
Note. If line 1 is zero or less, skip lines 2 through 20 and enter 0 on line 21. Otherwise, go on to line 2.  
2.  Enter onehalf of line 1  2.  1,000  
3.  Enter your adjusted gross income for the earlier year  3.  23,000  
4.  Enter the total of any exclusions/adjustments you claimed in the earlier year for:
 4.  0  
5.  Enter any taxexempt interest received in the earlier year  5.  0  
6.  Add lines 2 through 5  6.  24,000  
7.  Enter your taxable benefits for the earlier year that you previously reported  7.  0  
8.  Subtract line 7 from line 6  8.  24,000  
9.  If, for the earlier year, you were:  
 9.  25,000  
Note. If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.  
10.  Is the amount on line 8 more than the amount on line 9?  
No. Skip lines 10 through 20 and enter 0 on line 21.  
Yes. Subtract line 9 from line 8  10.  
11.  Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year  11.  
12.  Subtract line 11 from line 10. If zero or less, enter 0  12.  
13.  Enter the smaller of line 10 or line 11  13.  
14.  Enter onehalf of line 13  14.  
15.  Enter the smaller of line 2 or line 14  15.  
16.  Multiply line 12 by 85% (.85). If line 12 is zero, enter 0  16.  
17.  Add lines 15 and 16  17.  
18.  Multiply line 1 by 85% (.85)  18.  
19.  Refigured taxable benefits. Enter the smaller of line 17 or line 18  19.  
20.  Enter your taxable benefits for the earlier year (or as refigured due to a previous lumpsum payment for the year)  20.  
21.  Additional taxable benefits. Subtract line 20 from line 19. Also enter this amount on Worksheet 4, line 20  21.  0  
Do not file an amended return for this earlier year. Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lumpsum payment in 2014. 
Complete Worksheet 1 and Worksheets 2 and 3 as appropriate before completing this worksheet.  
1.  Enter the total amount from box 5 of ALL your Forms SSA1099 and RRB1099 for 2014, minus the lumpsum payment for years before 2014  1.  $9,000  
Note. If line 1 is zero or less, skip lines 2 through 18, enter 0 on line 19 and go to line 20. Otherwise, go on to line 2.  
2.  Enter onehalf of line 1  2.  4,500  
3.  Enter the amount from Worksheet 1, line 3  3.  25,500  
4.  Enter the amount from Worksheet 1, line 4  4.  0  
5.  Enter the amount from Worksheet 1, line 5  5.  0  
6.  Combine lines 2, 3, 4, and 5  6.  30,000  
7.  Enter the amount from Worksheet 1, line 7  7.  0  
8.  Subtract line 7 from line 6  8.  30,000  
9.  Enter the amount from Worksheet 1, line 9. But if you are married filing separately and lived with your spouse at any time during 2014, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then, go to line 18  9.  25,000  
10.  Is the amount on line 8 more than the amount on line 9? No. Skip lines 10 through 18, enter 0 on line 19, and go to line 20. Yes. Subtract line 9 from line 8  10.  5,000  
11.  Enter the amount from Worksheet 1, line 11  11.  9,000  
12.  Subtract line 11 from line 10. If zero or less, enter 0  12.  0  
13.  Enter the smaller of line 10 or line 11  13.  5,000  
14.  Enter onehalf of line 13  14.  2,500  
15.  Enter the smaller of line 2 or line 14  15.  2,500  
16.  Multiply line 12 by 85% (.85). If line 12 is zero, enter 0  16.  0  
17.  Add lines 15 and 16  17.  2,500  
18.  Multiply line 1 by 85% (.85)  18.  7,650  
19.  Enter the smaller of line 17 or line 18  19.  2,500  
20.  Enter the total of the amounts from Worksheet 2, line 21, and Worksheet 3, line 14, for all earlier years for which the lumpsum payment was received  20.  0  
21.  Taxable benefits under lumpsum election method. Add lines 19 and 20  21.  $2,500  
Next. Is line 21 above smaller than Worksheet 1, line 19? No. Do not use this method to figure your taxable benefits. Follow the instructions on Worksheet 1 to report your benefits. Yes. You can elect to report your taxable benefits under this method. To elect this method:  

Previous Page  Table of Contents  Top of Page  Index  Next Page 