Income Sources

Income Sources That Are Household Income

The sources of income that you are required to report are shown here. Many of these figures can be taken from the Federal Form(s) 1040 and related schedules. Refer to line-by-line instructions on Schedule HI-144 for more details. Consultation with a tax preparer may also be helpful.

Tip: Allow time to collect all the income sources, any proofs of payment, and forms you need for everyone in your household.

  • Cash public assistance and public relief*
  • Social security/SSI/SSDI/railroad retirement/veteran’s benefits, taxable and nontaxable*
  • Unemployment compensation/worker’s compensation
  • Wages, salaries, tips, etc.
  • Interest and dividends**
  • Interest on U.S., state, and municipal obligations, taxable and nontaxable
  • Alimony, support money, child support, cash gifts
  • Business income***
  • Capital gains, taxable and nontaxable. Include nontaxable gains from sale of primary residence***
  • Taxable pensions, annuities, IRA and other retirement fund distributions. Include ROTH IRA earnings distributions
  • Rental and royalty income***
  • Income from farms, partnerships, S corporations, LLCs, estates, or trusts***
  • Other income including prizes and awards, gambling or lottery winnings, director’s fees, employers allowances, taxable refunds from Federal return 1040, Line 10, allowances by dependents of armed services personnel and military subsistence payments (BAH, FSA), loss of time insurance, cost of living adjustment (COLA) paid to federal employees
  • Income exceeding $6,500 for exceptions involving dependents *

There may be exceptions, so refer to “Income Sources That Are Not Household Income” for more information ** If you are under the age of 65 as of December 31 of the tax year and the total interest and dividend income reported are in excess of $10,000, your household income is increased by the total interest and dividend income greater than $10,000 *** If losses, see instructions for limits

Income Sources That Are Not Household Income

The following income sources are not considered to be Household Income:

  • Foster care payments
  • Payments received for the care of eligible persons with developmental disabilities (formerly Difficulty of Care)
  • In-kind relief by a government agency, such as fuel assistance
  • Food from a governmental agency
  • Gifts from nongovernmental sources, such as assistance for fuel, utilities, and rent
  • The first $6,500 of cash gifts received by the entire household unless used for support
  • The first $6,500 of income received by a person who qualifies as your dependent and who is your parent or adult child with a disability
  • The first $6,500 of income earned by a full-time student who qualifies as your dependent

For further clarification, refer to who is a member of your household?

Allowable Adjustments to Reduce Household Income

  • Social Security and Medicare tax withheld on wages
  • Self-employment tax
  • Child support paid—be prepared to provide proof of payment
  • Business expense for Reservists
  • Alimony paid
  • Tuition and Fees deduction
  • Self-employed health insurance deduction
  • Health Savings Account deduction

Go back to how to determine household income or learn more about household income.