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Publication 554

Other Items(p19)

The following items generally are excluded from taxable income. You shouldn't report them on your return, unless otherwise indicated as taxable or includable in income.

Gifts and inheritances.(p19)

In most cases, property you receive as a gift, bequest, or inheritance isn't included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you. If property is given to a trust and the income from it is paid, credited, or distributed to you, that income also is taxable to you. If the gift, bequest, or inheritance is the income from property, that income is taxable to you.

Veterans' benefits.(p19)

Don't include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). See Pub. 525.

Public assistance benefits.(p19)

Other items that generally are excluded from taxable income also include the following public assistance benefits.
Welfare benefits.(p19)
Don't include in your income benefit payments from a public welfare fund based upon need, such as payments due to blindness. However, you must include in your income any welfare payments that are compensation for services or that are obtained fraudulently.
Payments from a state fund for victims of crime.(p19)
Don't include in your income payments from a state fund for victims of crime, if the payments are in the nature of welfare payments. Don't deduct medical expenses that are reimbursed by such a fund.
Home Affordable Modification Program (HAMP).(p19)
If you benefit from Pay-for-Performance Success Payments or PRA investor incentive payments under HAMP, the payments generally aren’t taxable. For more information, see Pub. 4681.
Mortgage assistance payments.(p19)
Payments made under section 235 of the National Housing Act for mortgage assistance aren't included in the homeowner's income. Interest paid for the homeowner under the mortgage assistance program can't be deducted.
Also, mortgage payments provided under the Department of Housing and Urban Development's Emergency Homeowners' Loan Program (EHLP), state housing finance authorities receiving funds allocated from the Housing Finance Agency Innovation Fund for the Hardest-Hit Housing Markets (HFA Hardest Hit Fund), or other similar state programs receiving funding from EHLP are excluded from income. Interest paid for the homeowner under the EHLP or the HFA Hardest Hit Fund may be deductible. See Form 1098-MA, Mortgage Assistance Payments, and its instructions for details.
Payments to reduce cost of winter energy use.(p19)
Payments made by a state to qualified people on the basis of need to reduce their cost of winter energy use aren't taxable.
Nutrition Program for the Elderly.(p19)
Food benefits you receive under the Nutrition Program for the Elderly (now known as the Nutrition Services Incentive Program) aren't taxable. If you prepare and serve free meals for the program, include in your income as wages the cash pay you receive, even if you also are eligible for food benefits.
Reemployment Trade Adjustment Assistance (RTAA).(p19)
Payments you receive from a state agency under the RTAA must be included in your income. The state must send you Form 1099-G to advise you of the amount you should include in income. The amount should be reported on Form 1040, line 21, or Form 1040NR, line 21.

Persons with disabilities.(p19)

If you have a disability, include in income compensation you receive for services you perform unless the compensation is otherwise excluded. However, don't include in income the value of goods, services, and cash that you receive, not in return for your services, but for your training and rehabilitation because you have a disability. Excludable amounts include payments for transportation and attendant care, such as interpreter services for the deaf, reader services for the blind, and services to help individuals with an intellectual disability do their work.


Medicare benefits received under Title XVIII of the Social Security Act aren't includible in the gross income of the individuals for whom they are paid. This includes basic (part A (Hospital Insurance Benefits for the Aged)) and supplementary (part B (Supplementary Medical Insurance Benefits for the Aged)).

Social security benefits.(p19)

The Social Security Administration (SSA) provides benefits such as old‐age benefits, benefits to disabled workers, and benefits to spouses and dependents. These benefits may be subject to federal income tax depending on your filing status and other income. See Pub. 915 for more information. An individual originally denied benefits, but later approved, may receive a lump-sum payment for the period when benefits were denied (which may be prior years). See Pub. 915 for information on how to make a lump‐sum election, which may reduce your tax liability. There are also other types of benefits paid by the SSA. However, supplemental security income (SSI) benefits and lump‐sum death benefits (one‐time payment to spouse and children of deceased) aren’t subject to federal income tax. For more information on these benefits, go to
Social security benefits are includible in gross income if (a) you are married filing a separate return and you lived with your spouse at any time in 2017 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly).