6.1 Social Security Income: Back Payments
We received social security benefits this year that were back pay
for prior years. Do we refile our returns for prior years? Are the back benefits
paid in this year for past years taxable for this year?
You must include the taxable part of a lump-sum (retroactive) payment of
benefits received in the current year in your current year's income, even
if the payment includes benefits for an earlier year.
Generally, you use your current year's income to figure the taxable part
of the total benefits received in the current year. However, you may be able
to figure the taxable part of a lump-sum payment for an earlier year separately,
using your income for the earlier year. You can elect this method if it lowers
the taxable portion of your benefits. Refer to Publication 915, Social
Security and Equivalent Railroad Retirement Benefits, for a detailed explanation
of the election and worksheets.
References:
- Publication 915, Social Security and Equivalent Railroad
Retirement Benefits
- Tax Topic 423, Social security and equivalent railroad
retirement benefits
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