Eva Rosenberg of MarketWatch looks at how lump sum payments for Social Security Disability are taxed.

  1. Is Social Security Disability Income subject to taxation? – Yes, in the same way that retirement Social Security payments are taxed.
  2. Does a lump sum that includes payment for previous years need to be reported in a single year?  – Yes, but see article for details.
  3. Do you need to file amended returns and report the amounts awarded in the year they should have been received? – No