8 Types Of Income On which You Don’t Have To Pay Taxes In The United States

Veterans benefits

Benefits paid to veterans and their families are not subject to taxes. These include, among others, education, training and subsistence allowances, disability compensation, housing and vehicle subsidies.

Social assistance programs

Welfare payments, such as those provided by the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF) program, are not subject to tax by the IRS.

Workers' compensation

If you receive workers’ compensation for an employment-related illness or injury, this income is tax-exempt as long as payments are made under the workers’ compensation law.

Foster care payments

If you are a foster parent who receives foster care payments from a child-placing agency or state or local government, this income is not subject to tax.

Disaster relief grants

Under the Emergency Assistance and Disaster Relief Act, if you receive relief grant payments after a disaster and use the proceeds to cover necessary expenses, such as medical, dental, housing.

Supplemental Security Income (SSI)

This government program, which provides monthly benefits to low-income people over the age of 65, blind or disabled, is not subject to taxes.

Credit card rewards

Most rewards earned on credit cards, including cash back, miles and points, are not considered taxable income.

Academic scholarships

As long as these are used to cover tuition, registration fees, or course-related expenses at an eligible institution, they are not considered taxable income.

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