Survivors benefits

[superman]

Does anyone know if survivors benefits are taxable. I just has a client call me and she has just received some survivors benefits that were from a back claim in 1999. At the time she was a minor and her father was murdered 12 years later the social security finally settled this claim and just now paid her.

I was wondering is there a way to go back and amended for the years where the money should of been received or do I need to include this on this years tax return. The real kicker is that back in 1999 this client would of been a minor and the money not taxable. Now is a different story of course.

Any thoughts would be appericated.

Superman.

[David1980]

See IRS Publication 915 page 11 "Lump Sum Election".

[BOB W]

Any SS is taxable, but only if there is other income. The normal thresholds and %s apply regardless of age. Yes, Lump sum election can be used to spread out lower income years. Most programs have a worksheet to make that computation easier. If there is no other income in the current year, all of the SS is non-taxed.

[David1980]

If there is no other income in the current year, all of the SS is non-taxed.

Actually, I've seen a lump sum payment that was large enough to be taxable on it's own. Normally you'd never get enough social security to have taxable amounts with social security income alone, but benefits going back to 1999 it could be. You'd have to have a distribution exceeding $50,000 for any to be taxable (without having other income) with single filing status.

[Gary2]

Actually, I've seen a lump sum payment that was large enough to be taxable on it's own. Normally you'd never get enough social security to have taxable amounts with social security income alone, but benefits going back to 1999 it could be. You'd have to have a distribution exceeding $50,000 for any to be taxable (without having other income) with single filing status.

Which means you'd have to go to the trouble of filing a return, claiming the Lump Sum Election, in order to avoid paying taxes on that.