There is a tax form you can get, that I cant remember right this minute the name of lol. But anyways it lets you divide the lump sum up into the years that the backpay was for.

I also need to do this, but was told by the IRS not to worry about it until 2009 when the Social Security will send the tax information. Then is when we will need that form.

I do know if you want more information just go over to irs.gov and do a search for lump sum, and it will have all the information you need.