Taxation of Lump Sum Social Security Disability Payments

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