All articles 10 min read

Lump-Sum Social Security Payments: The Prior-Year Election: Social Security Benefit Taxes (2025 IRS Guide)

This guide covers “Lump-Sum Social Security Payments: The Prior-Year Election” within social security benefit taxes. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 915 (2025), Social Security and Equivalent Railroad Retirement Benefits, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2025 in your 2025 income, even if the payment includes benefits for an earlier year.

Lump-Sum Social Security Payments: The Prior-Year Election

Terry Jackson is single. In 2024, Terry applied for social security disability benefits but was denied based on ineligibility. Terry appealed the decision and won. In 2025, Terry received a lump-sum payment of $6,000, of which $2,000 was for 2024 and $4,000 was for 2025. Terry also received $5,000 in social security benefits in 2025, so Terry’s total benefits in 2025 were $11,000. Terry’s other income for 2024 and 2025 is as follows.

Income 2024 2025
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

To see if the lump-sum election method results in lower taxable benefits,Terry completes Worksheets 1, 2, and 4 from this publication. Terry doesn’t need to complete Worksheet 3 because Terry’s lump-sum payment was for years after 1993.

Terry completes Worksheet 1 to find the amount of taxable benefits for 2025 under the regular method. Terry completes Worksheet 2 to find the taxable part of the lump-sum payment for 2024 under the lump-sum election method. Terry completes Worksheet 4 to decide if the lump-sum election method will lower Terry’s taxable benefits.

After completing the worksheets, Terry compares the amounts from Worksheet 4, line 21; and Worksheet 1, line 19. Because the amount on Worksheet 4 is smaller, Terry chooses to use the lump-sum election method. To do this, Terry checks the box on Form 1040 or 1040-SR, line 6c. Terry then enters $11,000 on Form 1040 or 1040-SR, line 6a, and the taxable benefits of $2,500 on line 6b.

Terry’s filled-in worksheets (1, 2, and 4) follow.

Terry Jackson’s Filled-in Worksheet 1. Figuring Your Taxable Benefits

Keep for Your Records:

Before you begin:

  • If you are married filing separately and you lived apart from your spouse for all of 2025, check the box on Form 1040 or 1040-SR, line 6d.

  • Don’t use this worksheet if you repaid benefits in 2025 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2025 (box 3 of Forms SSA-1099 and RRB-1099). None of your benefits are taxable for 2025. For more information, see Repayments More Than Gross Benefits.

  • If you are filing Form 8815, Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989, don’t include the amount from line 2b of Form 1040 or 1040-SR on line 3 of this worksheet. Instead, include the amount from Schedule B (Form 1040), line 2.
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on Form 1040 or 1040-SR, line 6a 1. $11,000
2. Multiply line 1 by 50% (0.50) 2. 5,500
3. Combine the amounts from Form 1040 or 1040-SR, lines 1z, 2b, 3b, 4b, 5b, 7a, and 8 3. 25,500
4. Enter the amount, if any, from Form 1040 or 1040-SR, line 2a 4. -0-
5. Enter the total of any exclusions/adjustments for:

  • Adoption benefits (Form 8839, line 30),

  • Foreign earned income or housing (Form 2555, lines 45 and 50), and

  • Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico

 5. -0-
6. Combine lines 2, 3, 4, and 5 above 6. 31,000
7. Enter the total of the amounts from Schedule 1 (Form 1040), lines 11 through 20, and 23 and 25 7. -0-
8. Is the amount on line 7 less than the amount on line 6?
No. stop, non of your benefits are taxable None of your social security benefits are taxable. Enter -0- on Form 1040 or 1040-SR, line 6b.
Yes. Subtract line 7 from line 6 8. 31,000
9. If you are:

  • Married filing jointly, enter $32,000; or

  • Single, head of household, qualifying surviving spouse, or married filing separately and you lived apart from your spouse for all of 2025, enter $25,000

 9. 25,000
Note: If you are married filing separately and you lived with your spouse at any time in 2025, skip lines 9 through 16, multiply line 8 by 85% (0.85), 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. stop, non of your benefits are taxable None of your benefits are taxable. Enter -0- on Form 1040 or 1040-SR, line 6b. If you are married filing separately and you lived apart from your spouse for all of 2025, check the box on Form 1040 or 1040-SR, line 6d.
Yes. Subtract line 9 from line 8 10. 6,000
11. Enter $12,000 if married filing jointly; or $9,000 if single, head of household, qualifying surviving spouse, or married filing separately and you lived apart from your spouse for all of 2025 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. Multiply line 13 by 50% (0.50) 14. 3,000
15. Enter the smaller of line 2 or line 14 15. 3,000
16. Multiply line 12 by 85% (0.85). If line 12 is zero, enter -0- 16. -0-
17. Add lines 15 and 16 17. 3,000
18. Multiply line 1 by 85% (0.85) 18. 9,350
19. Taxable benefits. Enter the smaller of line 17 or line 18. Also enter this amount on Form 1040 or 1040-SR, line 6b 19. $3,000
Tip: If you received a lump-sum payment in 2025 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.

Terry Jackson’s Filled-in Worksheet 2. Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)

Keep for Your Records:

Enter earlier year 2024
1. Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum 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 to line 2.
2. Multiply line 1 by 50% (0.50) 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:

  • Adoption benefits (Form 8839),

  • Qualified U.S. savings bond interest (Form 8815),

  • Student loan interest (Schedule 1 (Form 1040), line 21),

  • Foreign earned income or housing (Form 2555), and

  • Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico

 4. -0-
5. Enter any tax-exempt 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:

  • Married filing jointly, enter $32,000; or

  • Single, head of household, qualifying surviving spouse, married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000

 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% (0.85), 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; or $9,000 if single, head of household, qualifying surviving spouse, 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. Multiply line 13 by 50% (0.50) 14. _____
15. Enter the smaller of line 2 or line 14 15. _____
16. Multiply line 12 by 85% (0.85). If line 12 is zero, enter -0- 16. _____
17. Add lines 15 and 16 17. _____
18. Multiply line 1 by 85% (0.85) 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 lump-sum 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-
Caution: Don’t 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 lump-sum payment in 2025.

Terry Jackson’s Filled-in Worksheet 4. Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3)

Keep for Your Records:
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 SSA-1099 and RRB-1099 for 2025, minus the lump-sum payment for years before 2025 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 to line 2.
2. Multiply line 1 by 50% (0.50) 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 above 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 2025, skip lines 9 through 16, multiply line 8 by 85% (0.85), 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. Multiply line 13 by 50% (0.50) 14. 2,500
15. Enter the smaller of line 2 or line 14 15. 2,500
16. Multiply line 12 by 85% (0.85). If line 12 is zero, enter -0- 16. -0-
17. Add lines 15 and 16 17. 2,500
18. Multiply line 1 by 85% (0.85) 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 lump-sum payment was received 20. -0-
21. Taxable benefits under lump-sum election method. Add lines 19 and 20 21. $2,500
Next. Is line 21 above smaller than Worksheet 1, line 19?
No. Don’t 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, do the following.

  1. Check the box on Form 1040 or 1040-SR, line 6c.

  2. If line 21 above is zero, follow the instructions on line 10 for “No” on Worksheet 1. Otherwise:

    1. Enter the amount from Worksheet 1, line 1, on Form 1040 or 1040-SR, line 6a;

    2. Enter the amount from line 21 above on Form 1040 or 1040-SR, line 6b; and

    3. If you are married filing separately and you lived apart from your spouse for all of 2025, check the box on Form 1040 or 1040-SR, line 6d.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

Back to all articles